There has been a lot of talk lately regarding L2s on Ethereum and whether they are beneficial to Ethereum L1 and the broader Ethereum ecosystem. In my opinion, L2s such as Base, Blast, Arbitrum One, and OP Mainnet are all beneficial to Ethereum, ushering in a mass of new users that otherwise wouldn’t be active without these innovations. While all of these L2s offer solutions with regards to Ethereum’s gas and scaling issues, I’m not fully sold on their convenience, especially for new users being onboarded into crypto for the very first time. In this article, I’ll discuss the pros and cons of L2s on Ethereum, and why certain types of decentralized applications are best built on L1s due to the lack of friction with regards to having great UI/UX.

Ethereum L2s have spurred many positive developments from incredibly cheap gas on transactions to innovations such as onchain art and a wide array of decentralized applications (dapps). You’ll find many of the most talented creators in the crypto space minting artworks or creating cool dapps to interact with, but what’s really awesome is how these L2s support their communities through onchain initiatives such as “Onchain Summer” for Base or contribution grants on Optimism. For creators like myself, it’s much easier to mint a piece of work on an Ethereum L2 as opposed to Ethereum L1 due to the incredibly cheap gas fees and ease of transactions. 

This same idea also applies to collectors, as they’re able to mint pieces from their favorite creators with very small gas fees compared to Ethereum L1. Numerous dapps have been birthed from Ethereum L2s, such as @fantasy_top_ (on X) on Blast, and @drakulaapp (on X) and @timedotfun (on X), both on Base. In the case of all three but Fantasy Top especially, hordes of crypto-native users were exposed to socialfi on a deeper level for the first time. However, are L2s really the solution for first-time crypto users being onboarded into the ecosystem?

To answer this question, let’s take a look at the recently shuttered socialfi app @friendtech (on X), which operated on Base L2. At its peak, FriendTech was the talk of the town in the crypto space with over $52 million in revenue generated by the company during their existence. However, according to CryptoSlate, FriendTech only generated $21 USD in revenue over the last 30 days, and thus relinquished control of their smart contracts. It’s unfortunate as FriendTech had a lot of potential, but bad UI/UX and a lack of attention for its community members plagued the app from the beginning of its struggles despite being backed by well-known crypto venture firm Paradigm. 

Furthermore, I’ll make the argument that being on an L2 made it tougher for users on FriendTech to complete simple tasks. For example, there was the extra step of swapping your ETH on mainnet for ETH on Base, which creates more friction in the onboarding process for any dapp, not just FriendTech. This goes for all L2s with the need to perform swaps in order to use dapps. I thought about a recent tweet from @cryptunez (on X) of Monad, who highlighted how Solana has been the most successful chain of 2024: https://x.com/cryptunez/status/1832778863769784611. Viral app Pump.fun, arguably one of the year’s largest success stories if not the most successful, is easy to use directly on Solana through a simple wallet connection and loading up a wallet on their platform. There’s no need to swap your L1 tokens to L2 tokens or take extra steps that only add further friction to the process for individuals, especially for first-time and relatively new crypto users.

This article represents my thoughts on the current Ethereum L2 debate happening over on X, and analyzes the situation with regards to both pros and cons. I feel L2s have their own place in the overall ecosystem, and are certainly beneficial to Ethereum L1 through the amount of user activity they generate. Additionally, these L2s solve important issues such as high gas fees on Ethereum L1, and are necessary. However, certain dapps are better meant to be built on L1s, which is my opinion in the case of FriendTech. 

A great choice for upcoming projects to build on is Monad, as there is a lot of buzz for their upcoming mainnet launch and it will be an L1 chain that prides itself on incredibly fast execution. There will presumably be less friction on a chain such as Monad for dapps, as there’s no need for users to perform the extra actions that are commonly associated with L2s. L2s are still a great choice to build on for creators, but it’s important to think about what exactly it is you’re building and whether it makes sense as a potential fit to operate on. Thank you for reading this article and I hope you learned a new piece of information or two; be sure to subscribe to stay up to date with the latest storylines in crypto.