Polygon Labs CEO criticizes Ethereum Layer 3 networks as Degen mints millionaires

Since its launch last week, the Degen Chain network has attracted a fair number of speculators—and its success has drawn in a number of critics. 

Degen Chain, built using Arbitrum Orbit, was launched by infrastructure provider Syndicate on Mar. 28 as a specialized ultra-low-cost network for the Degen token ($DEGEN), which has become the de facto community token for users of the Farcaster Web3 social media service. Since Farcaster runs on Base, an Ethereum Layer 2 network, Degen Chain is therefore a Layer 3 network, or L3. 

As Farcaster sets new user activity records and its parents company eyes a unicorn valuation, early Degen adopters have turned small stashes into fortunes: one trader who invested less than $7,000 into the token came away with over $2 million in profit. 

But while making fortunes from memecoins is nothing new to crypto, Degen's users make it one of the first L3 chains to achieve notable adoption. On Degen Chain, an ecosystem of even more memecoins, denominated in $DEGEN, has seen tens of millions of dollars in trading volume. 

Not everyone is supportive of the enthusiasm around L3 networks like Degen Chain, however. Polygon MATIC +3.97% Labs CEO Marc Boiron expressed his dissatisfaction for the focus on L3s in an X post on Sunday, writing "I’ll say the quiet part out loud: L3s exist only to take value away from Ethereum and onto the L2s on which the L3s are built. *You do not need L3s to scale* And this is why Polygon Labs does not work on L3s."

Boiron argues that L3 networks siphon security and value away from the Ethereum base layer. "If all L3s settled to one L2, then Ethereum would capture basically no value and, thus, Ethereum security would be at risk," Boiron wrote in another X post. Boiron did not immediately respond to a request for comment from The Block. 

Polygon Labs is best known for a variety of Ethereum Layer 2 scaling solutions, including the Polygon and Polygon zkEVM chains and other services. Polygon zkEVM faced a short period of downtime last weekend but has since recovered operations.