Should @Plasma be an L2? AJ argues that Plasma should be an L2 in order to save on validator costs - $550m per year in savings. I think this is long-term correct however the market structure has to fundamentally change to make it long-term correct. The L1 Premium ROI Right now there's an L1 premium even for assets that aren't competing as a store of value. Should this be the case? I can't see why - not in the long-term. But the market currently disagrees. Let's look at FDV comps: Arbitrum (L2) - $4.3 billion Optimism (L2) - $2.9 billion ZKSync (L2) - $1.1 billion Compare these to EVM L1 chains that could be L2s: Tron (L1) - $32 billion Plasma (L1) - $9.6 billion There's clearly an L1 Premium. Say $5 billion of Plasma's current FDV is due to L1 premium. That's worth 10 years of $500m (5% of FDV) per year in validator costs. Add to this: Plasma can throttle issuance at any time - why not decrease validator rewards to 1-2% as the network grows? If you think you can be a...
I think the incredible early success of Plasma is ironically the best case study for why L2 architectures are superior. I know this seems awfully counterintuitive (and self-serving) so let me explain. Plasma has done a historic job in go-to-market and launch work. I don’t think any chain has attracted more TVL in its first week in history. Its users are comfortable with using the product and building alongside them and Tether. Yet, as the Plasma team notes in their docs, today they are the only ones that are currently running validators and there are no validator rewards live today. As part of their progressive decentralization, they will be onboarding external validators and the inflation rate rewarding those validators will be 5% annually to start. In other words, in order to secure and decentralize the system, Plasma (at today’s prices) is committing to spending more than $550 million, when their users and developers have signaled already it’s not really a conditional...
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