Original author: The Rollup
Original translation: Vernacular Blockchain
In today’s crypto world, choosing which platform to deploy your application on is just as important as the product itself.
This brings up the billion dollar question that I think many developers have in their minds right now: which platform is the best choice for deploying my application?
In today’s post, I’ll cover what I consider to be the three best options right now and break down the pros and cons of each, as well as how upcoming technological advances will make this choice much easier than it is today.
For developers, the three best options are: deploying on a general-purpose second-layer network, in the Solana ecosystem, or building an application-specific chain. These decisions will have a profound impact on performance, security, user experience, and long-term viability.
This article will dive into the technical differences between these options, run through their respective pros and cons, and demonstrate the growing importance of application-specific chains in Ethereum’s fight against Solana.
1. General-purpose Layer 2 Network/L2 Rollups
1) Advantages
Security inheritance: General-purpose L2s or Rollups (such as Optimism or Arbitrum) inherit the security of Ethereum. This means that applications built on these platforms can benefit from Ethereums strong security without having to maintain their own validator cluster. This is particularly important for application launches, as it is very difficult to bootstrap your own economic security through a validator cluster (usually as an L1).
Not to mention, there are quite a few different general purpose L2s available.
Composability: Universal L2 provides a high degree of composability, allowing applications and protocols on the same L2 to interact seamlessly. The term money legos was first coined during the DeFi summer of 2020 and remains relevant today. One of the biggest advantages of building on-chain is composability.
This level of composability is not possible in software outside of traditional finance or crypto. This is particularly beneficial for DeFi applications that rely on liquidity and interoperability.
Developer-friendly: Building on a general-purpose L2 (usually) means you can take advantage of the EVM, which most crypto-native developers are already familiar with, which reduces the learning curve and speeds up development. For Rollups on other virtual machines (altVMs), there are some programming languages that are more familiar to non-crypto-native developers, such as Rust (used in stacks like Soon SVM), C, C++ (Arbitrum Stylus), Move (Movement Labs and Lumio), Linux (Cartesi), Web Assembly (Fluent), and even Sway from Fuel Network.
2) Disadvantages
Congestion and scalability issues: As more and more applications are deployed on the same L2, congestion may become a problem, leading to increased fees and slower transactions. This may degrade the user experience, especially for applications that require low latency.
The noisy neighbor problem does exist, and weve seen it happen on L2 during liquidations or events with heavy user interaction. This is a nuanced view, and parallelization of the EVM like MegaETH, either through Rollups or different execution environments as mentioned above, can help mitigate this problem.
Limited customization and profitability: General-purpose L2s are designed to meet a wide range of application needs, which means they often lack the flexibility to optimize for the specific needs of a single application. This can be a problem if you are a developer who wants to have custom gas tokens, custom block times, and transaction ordering rules. This can limit performance tuning and optimization of user experience.
One big realization I have is about MEV and sorting revenue. When you deploy an application on a general purpose L2 and they dont offer revenue sharing, you are actually leasing block space from the Rollup operator and earning revenue for them, which could have been redistributed to your application and community. Well talk about this later.
2. Application-specific chains
1) Advantages
Fully customizable: Application-specific chains allow developers to optimize every aspect of the blockchain environment for the needs of their application. This can result in higher performance, lower fees, and a better user experience.
You can internalize revenue through your own sovereign sorter and control transaction ordering, offering lower fees and a better user experience through gas payers or advanced account abstraction solutions, or extremely fast block times (like Reyas 100ms block time or Clearpools just launched RWA-focused Ozean appchain with a ton of unique features). By doing this, you unlock unique ways for developers and users on the chain to make money in a mutually beneficial way. More fees, transactions, and usage means more sorter revenue for the entire community, which you can distribute in any way you wish.
Scalability: Since the chain is dedicated to a single application or a set of related applications, there is no risk of congestion caused by other projects. You can own your own block space, eliminating the noisy neighbor (congestion) problem on the chain. Reduce gas fee spikes and have better control over your block space.
2) Disadvantages
Complexity and Overhead: While RaaS providers like Gelato Network, Conduit, Caldera, etc. help simplify the process of launching new chains, building and maintaining an application-specific chain requires more preparation and resources than deploying applications on a general-purpose L2 (deploying smart contracts vs. deploying an entire chain).
While teams like Layer Labs and other incubators can help, overall the process of launching a chain is more onerous. From day one you’ll need to consider interoperability providers, ordering (most RaaS offer some options), and issues like RPC — although Lava Network may be able to help with this.
Interoperability Challenges: While frameworks such as Cosmos offer built-in interoperability solutions, using a general purpose L2 is more complex than interacting with the broader Ethereum L2 ecosystem. As an application chain, the biggest issue you face is how to acquire users from day one, and which interoperability provider will help and support you?
Consider Hyperlane, Union Build, Jumper Exchange, LayerZero, and eventually Omni and AggLayer. Coordinating blockchain builds will also play an important role, such as teams like Astria and Nodekit.
Additionally, if you want solvers to provide fast interoperability, you may need to build relationships with large solver teams such as Everclear, AcrossProtocol, LiFi Protocol, or Wintermute. These challenges, coupled with the cross-chain user experience problems, constitute the biggest problem for launching application chains.
I will discuss this further later.
3. Solana
1) Advantages
Extremely high performance: Solana is designed for high-performance applications, capable of processing thousands of transactions per second with extremely low latency (although transactions sometimes fail). Its speed makes Solana an ideal choice for applications that rely on low latency and high performance. These factors also extend to the user experience, which is very friendly to any crypto user.
Unified experience: Solanas single state machine is very attractive from a composability perspective. This makes building money legos easier than on an application chain, but similar to the experience on a general-purpose L2. This architecture provides a unified environment where all applications share the same state, and you can also attract network effects from successful applications like Kamino Finance and JupiterExchange.
Ecosystem growth trajectory: Solana’s ecosystem and developer growth has been steadily rising. The ecosystem has strong support for DeFi, NFTs, and broader Web3 applications, even memecoin. Its developer community is also expanding due to the ability to write code in Rust, providing more resources and tools for new projects as well as non-crypto native developers.
I think this ecosystem will continue to expand, and your application may benefit from the network effects of this expansion. See below for a map of the ecosystem from earlier this year:
2) Disadvantages
Centralization Risk: Despite its technical advantages, Solana has received some criticism for centralization issues. Its validator network is smaller and more expensive to set up than Ethereum. Solana is less censorship-resistant than building on Ethereum L1, but I think it has an advantage over L2 with a centralized sorter. However, the somewhat centralized nature of the chain is a product of its early development stage and needs to be taken into account.
Network outages: Solana has experienced network outages and stability issues several times, which has raised concerns about its reliability. Although it has been able to recover each time, it remains a risk for developers who need to be online all the time. This has not happened again in recent times, which is a positive sign.
The above reasons are presented as objectively and neutrally as possible, but I still conclude that application-specific chains are between general-purpose L2 and Solana in terms of trade-offs and performance.
I also found this chart very helpful:
In my opinion, application-specific chains provide a viable strategy for modular ecosystems to compete with monolithic L1s in terms of performance and developer experience. By allowing developers to build customized environments optimized for specific use cases, application chains can provide performance and flexibility comparable to or even exceeding these L1s.
However, the key is to understand that correct interoperability and chain abstraction are key to achieving this modular Rollup-centric scaling roadmap. As new chains continue to be launched, the fragmentation problem will only increase.
Teams like Xion, Okto, Particle Network, NEAR Protocol, Halliday, Aarc, and others are working on chain abstraction and will play an important role in this. Without these and better interoperability solutions, the modular future will be at risk.
4. Summary
While general-purpose L2s and Solana each offer compelling advantages, application-specific chains present an opportunity for builders to profitably specialize and compete with the scale and composability of general-purpose L2s, Solana, and other L1s.
As the modular ecosystem expands, application-specific chains will play a key role in the growth of popular applications. However, this vision strictly depends on establishing a standard for interoperability solutions as soon as possible.
I believe this goal will be successfully achieved and we will see a boom in interconnected application-specific Rollups in the coming years.
