Degen Chain - Packing Layers
Prompt
Degen Chain (DEGEN) went live last week with a Layer-3 (L3) on Base and found great early success. Other projects are also building and exploring their own Layer-3s like Momoka (Lens), PengChain (Pudgy Penguins), XAI Games, ApeChain (Yuga Labs), etc.
- While degens are going to degen, we consider some key questions brought about by Layer-3s -
- How big is the opportunity for Layer-3s, considering Layer-2 transactions and alt-L1 fees are already in the cents?
- Ethereum Layer-2s still operate with training wheels - upgradable bridge contracts, centralized sequencers, and/or multisig security. Do Layer-3s pile on additional risk?
- Since Layer-3s settle on Layer-2s, does it dilute Ethereum’s value proposition?
Kunal previously worked in equity research and now considers himself a financial analyst in crypto. He specializes in valuation and bottom-up analysis for Layer-1 and DeFi protocols because he has yet to learn of a way to value NFTs.
Dustin was previously the Enterprise research director at Messari. He has a broad focus across crypto with a particular interest in AI x Crypto, Consumer financialization, DeFi, and general infrastructure.
Prior to joining Messari, Seth worked in traditional finance software and services, and has a MSc in Applied Mathematics. Seth is a Senior Research Analyst on the Enterprise Research team, and focuses on infrastructure, verifiable compute, and the AI x Crypto intersection.