Economics within the Generally Unusual World of Web3 by @ttunguz

Blockchains are databases software builders use to construct novel user experiences. Simply as lots of of various databases exist in web2, completely different blockchains have developed in web3.

In September, I revealed the State of Web3 in Data. I’ve been watching a type of charts very intently : slide 25 which tracked L2s & L1s.

Layer 2s (or L2s) like Arbitrum & Optimism, sit atop Ethereum (an L1). They supply quicker & cheaper transactions for software builders.

The common Ethereum transaction prices about $2.60 as of this writing, whereas on Arbitrum it costs $0.07, a 97% financial savings.

For a person transaction, the distinction might not matter, however for software builders & frequent merchants, these {dollars} accumulate over time. Within the long-term, decrease costs will drive extra exercise, important for broader adoption of web3 applied sciences.

In September, L2s processed about 30% of Ethereum transactions. Six months later, that determine is 67% in keeping with Dune. Inside the Ethereum ecosystem, this quantity ought to asymptote to 90-95%.

Economics works – even within the generally unusual world of web3.

As web3 evolves, we’ll see extra cases of economics driving conduct :

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