Conversation with Avalanche DeFi representative: What is the role of L1 in the L2 era?

Author: Ignas | DeFi Research

Translation: Deep Tide TechFlow

Crypto researcher Ignas interviewed Luigi D’Onorio DeMeo, DeFi/DevRel lead at Avalanche, to share his views on what role L1s will play in the L2 era, and we also explored Avalanche’s ultimate vision.

Here are his views:

Both solutions promise to scale Ethereum through fast transactions and lower fees, which was the original purpose of L1. So, what is the role of the L1 copycats now? Will they disappear, evolve, or continue to offer unique functionality?

Luigi disagrees that Ethereum has already won the L1 “war.” He warns that centralization risks arise if all activity is concentrated on Ethereum. He hopes to have multiple L1s to provide choice, more fault tolerance, and introduce competition/innovation at the L1 level.

Interestingly, this is exactly the opposite of what Sanket, growth lead at Polygon, shared with me in our AMA – he believes that Ethereum has already won the L1 war.

Why does Avalanche have three chains + subnets? Luigi explains:

  • C-Chain is EVM compatible, suitable for smart contracts with fast finality;
  • P-Chain is the place for validation;
  • X-Chain is a UTXO-based chain for asset transactions.

The vision of Avalanche subnets is: “Subnets allow anyone to build their own blockchain. They can be customized based on levels of validator permission, different virtual machines, and more. Many projects will want their own chain, such as TSM, Dexalot, DYDX, etc.”

Why build on subnets instead of L2 or L3:

“L3 and L2 lack composability, while subnets, there is no reason why you can’t deploy an L2 as a subnet, have validators run sorters, and use Avalanche Warp Messaging to communicate with other subnets.”

The future of Avalanche’s C-chain: “The C-chain is the liquidity center of Avalanche. As the subnets grow, all native assets on the C-chain, exchange integrations, and more will be leveraged through Avalanche Warp Messaging.”

“As the subnets grow, the C-chain will flourish.”

Luigi introduced Ava Labs’ AvaCloud: “AvaCloud makes it easier, faster, cheaper, and less risky to bring Web3 blockchains to market with no-code deployment. We are constantly striving for a world that makes deploying application chains as simple as possible.”

About the Avalanche blockchain ecosystem: “The value proposition of Avalanche’s C-chain is different from other systems. The main network is a ‘special subnet’. The C-chain allows for smart contract deployment and has fast finality.”

Luigi talks about Avalanche’s ultimate goal: “Our goal is to provide infrastructure that enables anyone to seamlessly build their own blockchain. We have subnets from many enterprise and institutional clients, including SK Planet, TSM, Bowlero, Gunzilla, and more.”

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