Sonic Labs founder argues L2s as appchains are not logical for builders Sonic Labs founder argues L2s as appchains are not logical for builders
Andre Cronje believes that appchains have a high associated cost of infrastructure and lacks support for developers.
2 min read
Updated: Oct. 14, 2024 at 9:15 am UTC
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Sonic Labs (formerly Fantom) cofounder Andre Cronje believes that developers should avoid using layer 2 (L2) app chains. Appchains are customized L2 blockchains designed to meet an application’s specific needs.
In an X post, Cronje listed several disadvantages hindering the growth of appchains. These drawbacks include the high cost of infrastructure, fragmented liquidity, and lack of support for developers.
Cronje noted that appchains lack infrastructure for deploying stablecoins, oracles, and institutional custody. More importantly, Cronje said that the cost of infrastructure is grossly underestimated.
According to him, the costs of custody, exchanges, oracles, bridges, etc. are pretty high. Cronje’s team has already spent $14 million on such expenses this year, a large part of which includes recurring costs.
However, Hilmar Orth, the founder of Gelato Network, has a different opinion. According to Orth, developers can easily access infrastructure through rollup-as-a-service providers (RaaS). Orth said that RaaS providers and framework teams provide much support to developers, contrary to Cronje’s claims.
Cronje also claimed that appchains lead to fragmented liquidity forced onto vulnerable bridges.
Marc Boiron, CEO of Polygon Labs, noted that the AggLayer (aggregation layer) could potentially solve the issue by creating an interoperable network of appchains. Polygon’s AggLayer enables sovereign blockchains to share liquidity.
On the other hand, Orth noted that each rollup comes with its own bridges and market makers. Therefore, liquidity is likely to accumulate in a small number of chains with high total value locked (TVL). This means the remaining chains will just plug into that liquidity based on demand.
Orth added that faster zero-knowledge (zk) proofs will further make moving funds across rollups more seamless.
Community and network effects
According to Cronje, appchains lack a community of builders and users, which in turn “kills network effects.” Boiron, however, stated that network effects would be “alive and well” on the AggLayer, which aggregates users and liquidity. He wrote:
“So many frens contributing to the AggLayer and all are going to want to help grow the pie.”
Orth, however, believes that apps are there to compete with each other for users and are, therefore, not friends.
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Monika Ghosh
In 2020, Monika immersed herself in crypto, maintaining skepticism yet firmly believing blockchain could address key issues like financial disparity and transparency. A book-lover, she's also a passionate food enthusiast.
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