The Next Major Vibe Shift for Ethereum Could Be a Cambrian Explosion of Corporate Rollups
Sony’s announcement today of a new Ethereum Layer2 called Soneium might be a harbinger of big things to come. To understand why, we need to back up.
The ongoing Modular vs Monolithic architecture debate — the one askes whether everything a blockchain needs should be on split up or on a single solution — often happens in the context of decentralization and security. But there’s an important third variable: flexibility. A monolithic chain like Solana (or the other high-throughput L1s about to launch) is a bet on a single stack: the consensus mechanism, language, VM, fee model, transaction ordering, MEV treatment, even governance. It’s also a bet on a single go-to market strategy. Is this chain for memecoins or DeFi?
This approach is risky. Decentralized solutions are notoriously difficult to evolve — by design — and pivoting from the wrong bet is notoriously difficult. Case in point: the Lightning Network, which the Bitcoin community went all in on after the block size war. This was a bad bet, one that cost us 7 years.
The modular approach that Ethereum took is a lot more flexible. Not wanting to bet on anything other than credible neutrality was a major (and oft forgotten) reason the community went this route. EVM or not? Optimistic or ZK? Prioritize liveness or safety? What should the gas token be? What’s the purpose of this rollup? Centralized or decentralized sequencers?
The L1 doesn’t care.
This neutrality liberates other entities — some of which have nothing to do with Ethereum — to try stuff. So Coinbase tried Base, and it’s been a smash success. For devs, users, and its bottom line. Just as important as the additional revenues for Coinbase are the new things it can try, like gas-free transactions for USDC (where Coinbase earns float). This is theoretically doable on an L1 but more complicated. It’s a lot easier to offer gasless transactions on a rollup because the sequencer only pays wholesale fees.
All of this is a recipe for a Cambrian explosion of corporate and consumer rollups on Ethereum, with Sony’s announcement being just the start.
The success of Base, and other consumer-facing cheap L1s like BNB Chain and TON, has proven that consumers “get” the value of being on-chain, even if only subconsciously. They understand that even a more centralized blockchain is better than a dark database. Consumers want to be on chain, but they need an easier path than the standard UI/UX nightmare of seed phrases and gas fees.
Consumers need hand holding, and a corporate L2 can offer it. The sponsor can abstract away as much of the annoying on-chain stuff as it wants to. The sponsor can even offer a replica Web2 experience with all the crypto-y stuff happening on the backend. Not as ideal, but still better.
Launching an L2 is simpler and safer than doing one’s own L1, particularly for any regulated company that is worried about its reputation. There’s no need to sort out a consensus mechanism, or issue a token, keeping Gary off their back. An L2 can inherit most of the security of Ethereum, offer ETH as a collateral asset, and safely bridge over other desirable assets. An L2 can offer high throughput with fewer liveness issues.
All of these factors make me believe that we are about to experience a surge of new branded L2s from all sorts of companies. Like: A Robinhood rollup for 24/7 trading of fractionalized equities. Or a Blackrock rollup for permissioned RWAs. Or a Disney one for stickers. Or a FanDuel one for fantasy sports. Or a Getty images one for picture authenticity and a WSJ one for fake news verification and a University consortium one for degrees and certifications.
The sky’s the limit, but here’s my ultimate fantasy: Meta launches a rollup to integrate directly with WhatsApp.
This could be done in partnership with a stablecoin issuer to integrate payments. Call it Libra Redux, with far fewer regulatory hurdles because it’s neither their chain or stablecoin. It’s just infrastructure, tied to Ethereum, that gives their users additional features.
Talk about onboarding the next billion users!
All of this could theoretically be done on someone else’s L1. But doing so is riskier, less controllable, and even if successful, less profitable. Put yourself in the shoes of a Meta executive contemplating launching their own L2 on Ethereum vs a collection of dApps on Solana.
If I’m right, then the next 12 months will see a bunch of these projects. That should improve the vibes around modular designs like Ethereum. Not just by increasing demand for block space and DA, but also by validating the wisdom of the approach.
