Polygon Labs CEO Marc Boiron strongly opposed layer 3 solutions, arguing that these threatened Ethereum’s value and security. According to him, if all L3s are focused on one L2, Ethereum will lose its value entirely, making it vulnerable to external threats. Hence, Polygon Labs has decided not to pursue developing L3 solutions.
When questioned about the potential risks, the CEO explained that if Ethereum fails to generate fees or has no prospect of earning fees other than a tiny amount of fees from this one L2, then the value of ETH will drop. In such a scenario, validators will no longer be willing to hold ETH because there is no economic future for it and, thus, will no longer be willing to secure the network.
Boiron stated that one needs to consider the competitive landscape and its long-term impact on fees. He argued that ETH was attacked by alt-DA layers. So, a proposal like EIP 4844 was brought in to counter the challenges posed by the alternative decentralized application [DA] layers, which include reducing costs to retain market competitiveness. The CEO expressed confidence that such measures would lead to higher fees and incentivize validators to stake in and secure the network over the long run.
Polygon’s Strategy for Ethereum Scaling
However, Boiron made a clear distinction between EIP 4844 and L3 solutions, noting that the latter could amplify network effects on L2 platforms, endangering Ethereum’s position.
This analysis is different with L3s because the cost of L2s can be just as low as the cost of alt-Ethereum options, which means there is no need to go to L3s. All going to L3s does is increase the network effects on the L2s that capture a significant portion of the L3 market. With those network effects, especially via public companies that must maximize shareholder value, comes a desire to gobble up most of the market they can eat up. This creates risk for Ethereum, as there is no reason to believe an L2 does not acquire significant market power due to network effects.
In response to critics’ allegation that Polygon is limiting its scaling possibilities, Boiron defended the decision and emphasized the firm’s commitment to scaling Ethereum through innovative technologies such as zk technology [Polygon zkEVM], parallelization of the Ethereum Virtual Machine [EVM], and plans for privacy enhancements with Polygon Miden.