This post is taking part in the Lens x Kiwi Writing Contest.

Over the past year, nearly all consumer onchain behavior on Ethereum has transitioned from the L1 to a wide net of different Ethereum L2s. It's been a remarkable shift, and begs the question of how these L2s distinguish themselves and attract users to their chain if they all share the same major value prop (cheaper fees than L1). Let's take a look!

Any L2 ecosystem has three main stakeholders:

1. the entity operating the L2

2. the developers building protocols and apps on the L2

3. the end users transacting on the L2

A given chain is primarily in the business of selling blockspace. In order to do so, they need to bootstrap both sides of the blockspace "marketplace": on the supply-side, they need to attract developers to deploy applications, protocols, and assets onto their chain, for end users to transact on. On the demand-side, they need to attract end users (and their liquidity) to make their chain a viable place for developers to deploy on. How do they go about doing this in a sustainable and repeatable way, when pretty much all L2s "feel" the same to the end user and are technically not that different from one another?

In his essay, Vitalik talks about the cultural differences between these layer 2 chains. At the network level, the existence of these cultural extensions means that Ethereum itself can be credibly neutral, while Layer 2s can be more opinionated in their design and ecosystem development - which is a great outcome for end users.

Extending on Vitalik's point, I also think L2s are incentivized in their own capacity to develop unique cultures because it provides an answer to the question above. As the technology becomes more and more commoditized over time, culture and network effects become how these L2s distinguish themselves to customers. After all, most L2s technical differences (if they even exist) are largely invisible to end users.

Peter Drucker famously said "culture eats strategy for breakfast", regarding management of teams and organizations. For L2s, it seems that culture is the strategy. The types of users and apps a chain attracts, if sufficiently differentiated against other chains, can distinguish it as the place to be for developers and users in its respective category. We can look at four L2 solutions live on the market -- Base, Blast, Arbitrum, and Zora -- to see how their unique culture positions them to boostrap demand from specific userbases.

Base

Base is Coinbase's L2, and is also part of the broader OP stack. Base is still largely focused on building an "onchain economy" with the goal of bringing 1B

people onchain. This is evident from various strategies they've deployed:

  • marketing campaigns like Onchain Summer to highlight and reward people building on Base
  • commerce solutions and campaigns for business to sell goods on Base
  • social and identity primitives such as Basenames, along with an active presence on Farcaster that has made Base the de facto chain for Farcaster builders
  • IRL presences at events like Farcon and Fest, and their own Basecamp event

Base and Coinbase are also developing tech across the stack to make it easier for onchain consumers, such as:

  • Coinbase Smart Wallet which leverages account abstraction and passkeys to make it easy for any user to spin up a wallet and transact on mobile
  • OnchainKit, a developer SDK for building apps on Base

While Base might be more focused on consumer economic activity, they're still a home for other sectors like DeFi, enabling emerging protocols like Morpho and Aerodrome, as well as Coinbase-first initiatives like cbBTC.

Blast

Blast's culture is focused around speculation and farming, in addition to protocols built around its novel native yield and gas reimbursement features.

Blast's incentive model is structured around a concept called Blast Gold, which represents points that convert to $BLAST tokens after each season. Blast allocates gold to selected apps, which in then distribute gold to end users according to their own rules. This incentive program proved effective for bringing users onto Blast, but remains to be seen how strongly it can retain users post-airdrop.

Blast also aims to be the "full-stack chain", prioritizing a mobile-first UX to own everything from wallet creation to end user activity. Crypto is uniquely suited for money games, and Blast is aiming to be the best place for this sort of app.

Native incentives from Blast help attract speculative users to the chain, which in turn is great for apps built around primitives like farming, betting, etc.

Arbitrum

Arbitrum feels a bit more neutral than the rest of these from a cultural perspective, but has tilted towards sophisticated gaming and defi use cases which need high throughput and ultra-low-cost transactions. Arbitrum is also the first major L2 to achieve Stage 1 decentralization.

The Arbitrum DAO governs the Arbitrum ecosystem, and their revealed preferences of what they choose to fund are indicative of the culture and ecosystem they're building.

For example, Arbitrum is heavily focused on gaming - this past summer, the Arbitrum DAO passed a proposal to launch the Gaming Catalyst Program, to allocate over 225M ARB tokens (over $200M at time of passing) towards grants for developers building games on the chain.

Zora

Zora has established a unique culture at the forefront of onchain creativity, centered around its protocol and new mobile app. This is the first chain that feels like it's taking an app-first approach to the chain, abstracting the UX completely away - the main value prop for using Zora network isn't necessarily the network yet, but rather the Zora protocol and app itself.

It's one of, if not the only app where you can fully onboard via iPhone and begin transacting without ever touching a crypto wallet (you can boostrap funds with Apple Pay, and then natively transact just by clicking buttons in the mobile app).

Zora does offer some native incentives for developers through its protocol rewards mechanism, which enables external apps to capture a portion of funds from mints that they drive. In this regard, if you want to access all the users on the Zora app/protocol, it makes sense to offer some form of minting capabilities on your app (which should thus also support Zora network).

The common angle with all of these cultural distinctions is that each chain becomes a destination for a certain cohort of developers and users. As these cohorts strengthen over time, so do these L2's moats as the canonical place to go for engaging in their flavor of activity. Building a complex game with tons of microtransactions? Deploy on Arbitrum and reach all of their users interested in playing onchain games. Building an onchain social app? Deploy on Base and go to market via Farcaster. Building a sports betting app? Deploy on Blast. As a developer, deploying on a chain with a specific culture makes it easier to find users who are interested in that culture; and as a user, you'll find things to do onchain that are more closely aligned with your interests.

In this sense, designing L2s as cultural extensions of Ethereum not only makes sense at the network-level, but also as a strategic decision for each individual chain. L2s need to be opinionated about their culture in order to win and attract users. If they have no differentiation, or try to do too much at once, they can never be the best chain for any given use case.

*Note: I'm not involved or affiliated with any of these projects, these are just my observations as an external participant and user.*