Andre Cronje, co-founder of Sonic Labs (formerly Fantom), believes that developers should avoid using layer 2 (L2) application chains. Appchains are custom L2 blockchains designed to meet the specific needs of an application.
In an article X, Cronje listed several disadvantages hindering the growth of appchains. These disadvantages include the high cost of infrastructure, fragmentation of liquidity and lack of support for developers.
Cronje noted that applications lack the infrastructure to deploy stablecoins, oracles, and institutional custody. More importantly, Cronje said the cost of infrastructure is vastly underestimated.
According to him, the costs of custody, exchanges, oracles, bridges, etc. are quite high. Cronje’s team has already spent $14 million on such expenses this year, much 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 (RaaS) providers. Orth said RaaS providers and framework teams provide a lot of 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 problem by creating an interoperable network of application chains. 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 that the remaining chains will simply connect to this liquidity based on demand.
Orth added that faster zero-knowledge (zk) proofs will make transfers of funds between rollups even smoother.
Community and network effects
According to Cronje, apps lack a community of builders and users, which “kills network effects.” Boiron said, however, that network effects would be “very much alive” on the AggLayer, which aggregates users and liquidity. He wrote:
“So many frens are contributing to the AggLayer and all will want to help make the pie bigger.”
Orth believes, however, that the applications are there to compete with each other for users and are therefore not friends.
