Changpeng Zhao (CZ), founder and former CEO of Binance, shared his thoughts on the ongoing debate between Layer 1 (L1) and Layer 2 (L2) solutions, particularly for a new AI-driven projects.
According to the tweet, following a conversation with a founder, CZ highlighted that the trade-offs between building an independent L1 blockchain versus leveraging an existing L2.
CZ on Sovereignty vs Efficiency
Layer 1 blockchains, such as Ethereum or Solana, are known for offering sovereignty, decentralization, and control. For AI projects aiming to manage economic systems using blockchain, having their own L1 could mean greater autonomy and flexibility.
However, CZ pointed out that this approach comes with significant challenges-building and maintaining nodes, validators and infrastructure needs intensive resources. Moreover, operating on an isolated L1 can feel like being on a “lonely island,” disconnected from existing ecosystems.
On the other hand, Layer 2 solutions provide a more efficient alternative. By building projects on top of established L1s like Ethereum, projects do not need to be created on their own infrastructure. This way, one can tap into existing resources, like decentralized exchanges, tools, and communities.
Current Sentiments
The sentiment around L1 and L2 appears to be shifting in favor of L2 projects as it solves the problem of scalability and efficiency. As blockchain technology expands and matures, many developers realize that L1 offers foundation benefits, whereas L2 solutions are essential for handling increased transaction volumes without compromising security or decentralization.
As these AI projects grow, choice between L1 and L2 should be made keeping in mind the unique features of the project. A balanced approach that can combine both the layers may offer the best of both worlds where performance and decentralization can be enhanced for future blockchain apps.
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