Optimism Co-Founders: What Happened to the L2s? Ben Jones & Karl Floersch

Ben Jones and Karl Floersch argue that the L2 hype cycle failed because chains launched tokens and validator sets without differentiating block space or delivering real products to end users. Jones says chains without fundamentals saw their floor fall out when hype met reality, and Floersch adds that crypto lost the ability to hold itself accountable as outside actors began taking it seriously, requiring a reset from meme coin farms and circular dependency virality before real businesses could be engaged.

Jones frames the technology evolution in three phases: bespoke, standardized, and now specialized. The bespoke phase required a huge development cycle for a single use case. The standardized phase produced hundreds of identical chain clones claiming to be general purpose block space, which Jones says is not differentiated. The current specialized phase allows builders to tune a general purpose platform to their use case in months rather than a five to ten year R&D cycle. Floersch describes Optimism's core strategic focus as enabling everyone to build differentiated block space, and says the proliferation of L2s was always the plan since the point of L2s was to extend one chain's security to many L2s.

Optimism now operates what Jones describes as an enterprise SaaS business model, with enterprise deals estimated at five to six figures per month or seven figures per year, targeting roughly 100 to 200 customers. Revenue is now majority from enterprise sales rather than on-chain fees. The Coinbase deal was the breakout transaction that clarified how these technology stacks would be used and forced professionalization, including building SLAs, SLOs, a CRM, and a customer pipeline with BDRs and SDRs. A key lesson from that deal was to structure contracts in language legible to traditional financial institutions rather than crypto-native terms. Optimism's most successful customer segment is centralized exchanges building their own chains, with known customers including Coinbase with Base, Kraken, OKX, BitPanda, Upbit, and GEEWA, and the speakers identify FinTechs as the natural next segment after exchanges.

Optimism now offers OP Enterprise, a managed offering where customers request a chain and Optimism handles all technical details including a block explorer, sequencer, compliance modules, and RPC providers. The goal is to collapse the chain onboarding process from nine months down to a couple of weeks. Jones highlights compliance controls applied at the sequencer level as a meaningful capability, allowing trading locks to be imposed across all pairs for a particular block space. Large chain deals are commonly won or lost based on how much a chain is willing to pay upfront, and one company was offered 125 million dollars by a competing chain to deploy on their network. Optimism is transitioning away from large upfront incentive payments toward milestone-based incentive-aligned structures, framing a loss on payment size as a positive because it avoids incurring massive balance sheet debt.

Jones says Optimism accounts for greater than 50 percent of all L2 transactions with a team of approximately 90 people, and that competitors in enterprise chain deals include Arbitrum, Canton, Solana, and ZK Sync. BitPanda is building an L2 with a Euro stablecoin as the gas token and is pursuing full MiCA compliance, and the speakers note that MiCA and other regulations are driving previously hesitant institutions on chain while requiring their own customizable chains. Floersch identifies open source standards as having paid the most dividends of any strategic decision Optimism has made, because it allows customers like Base to collaborate on new protocol features even after heavy customization. He argues closed source chains are unlikely to become the open standard for creating chains.

Floersch argues that Ethereum's primary competitor is Bitcoin rather than Solana or Hyperliquid, because both compete as decentralized stores of value with credible neutrality. He says Ethereum competing directly with Solana and Hyperliquid on differentiated block space is a losing game, and that the framing of Optimism competing with Ethereum is a divide-and-conquer narrative he attributes to Solana community members. He expresses more admiration than competition toward Hyperliquid, viewing it as a good use case he wants to enable on Optimism infrastructure.

Jones says having a token has been a net positive overall for capitalization and that Optimism is not facing a runway problem, but describes watching the token price chart as absolutely brutal for morale. He attributes much of token price movement to macro factors such as capital rotating into AI, and warns that projects making the token the bottom line of everything they do are not building a sustainable business. Floersch argues that crypto's unique value proposition is decentralization, which no other platform can provide, but that complexity ceilings currently limit capability ceilings, and that composable block space could become a better web platform than web two if capabilities match or exceed it. Jones argues that the failure mode with AI and vibe coding is moving from zero to one too fast without comprehension, and that the bottleneck in agentic engineering is the developer's understanding and confidence rather than the speed of code generation.