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

Ben Jones and Karl Floersch argue that L2s got the delivery vehicle right by extending L1 capabilities and differentiating block space, but got the execution wrong by launching chains and tokens without real product differentiation or genuine user value. Karl frames the L2 hype cycle as an attempt to shortcut the validator set dynamic rather than making it easy to build on-chain products, and says crypto lost the ability to hold itself accountable, requiring a reset to move past meme coin farms and circular dependency virality.

Ben describes the technology evolution for chains as moving from bespoke to standardized to specialized. The first L2 use case was payments, which required a bespoke single-use-case solution. The trap was hundreds of clones of the same standardized block space claiming to serve all purposes. The current transition is from standardized to specialized, where a general purpose platform can be tuned to a specific use case in months rather than a five to ten year research and development cycle. Karl adds that the L2 meta being dead is analogous to saying the server meta is dead, and that crypto is still a fraction of a percent of building markets for the world despite stablecoin proliferation.

Optimism's business model is now essentially enterprise SaaS, with seven-figure annual deals for full-stack blockchain deployment. Ben estimates the target customer list at approximately 100 to 200 names. Deals are priced at five to six figures per month or seven figures per year, with tiered pricing depending on throughput scale requirements. Revenue is now majority from enterprise sales, with on-chain fees having historically served as a bridge to a more sustainable model. Optimism shifted from a percentage-cut fee model to a predictable monthly usage-based pricing model, which Karl says builds trust with institutional customers better than jargon-filled on-chain fee structures.

The Coinbase deal was the breakout transaction that clarified how these technology stacks would be used in the future, forcing Optimism to build SLAs and SLOs it previously had no way to replicate. Optimism now offers OP Enterprise, a managed offering where customers request a chain and Optimism handles all technical details, collapsing the chain onboarding process from nine months down to a couple of weeks. Full-stack deliverables include a block explorer, sequencer, compliance modules, RPC providers, and DeFi protocols such as lend-borrow and DEX functionality. Compliance controls can be applied directly in the sequencer to prevent tokens from spreading to the wrong hands or to impose trading locks.

Optimism's most successful customer segment is centralized exchanges, with Coinbase building Base, Kraken building Ink, OKX, and Bitpanda each deploying their own chains. FinTechs and traditional financial institutions such as Nasdaq, NYSE, and ICE are expected to be the next major customer segment, though traditional institutions have slower sales cycles. Bitpanda plans to be the first L2 with a Euro stablecoin as the gas-paying token and is pursuing full MiCA compliance. Regulatory clarity from MiCA is driving previously hesitant institutions on chain, but those institutions require their own customizable chains to meet compliance requirements. Incentive payments to win chain deals are becoming less common, and losing a deal purely on incentive payment size is described as a positive outcome because it avoids incurring massive debt on the balance sheet.

Karl says deploying on a separate L2 today does not provide the same level of interoperability as deploying a smart contract on Ethereum L1, but describes this as a bug not a feature expected to be solved. Once interoperability is solved, owning a chain will be analogous to owning a website, allowing businesses to connect to shared liquidity while maintaining a customized environment. Karl identifies open source standards as the single change that has paid off the most across everything Optimism has done, and handles greater than 50 percent of all L2 transactions.

Karl argues that Ethereum's primary competitor is Bitcoin, not Solana or Hyperliquid, because both compete as decentralized stores of value with credible neutrality. He calls the framing of Optimism as a competitor to Ethereum a Solana psyop, a divide and conquer strategy from outside the Ethereum ecosystem, and says Ethereum growing its ecosystem and being a store of value are not in conflict unless it sacrifices decentralization and sound money properties to chase growth. On token price, Karl says having a token has been great for capitalization but that watching a token price chart is absolutely brutal for internal morale, attributing much of the movement to macro factors such as capital rotating into AI rather than project fundamentals. Karl argues that crypto's unique value proposition is decentralization, which no other platform can provide, and that the current product market fit for blockchain appears to be capital markets and finance.