Ethereum's New Layer: L3 Networks Emerge as Gaming and DeFi Hubs

The Ethereum ecosystem is witnessing a new layer of innovation with the emergence of Layer 3 (L3) networks. These application-specific blockchains settle on top of Layer 2 (L2) solutions, such as Arbitrum and StarkNet, rather than directly on the base Ethereum chain.

L3s are designed to cater to specific use cases, like gaming, privacy, or derivatives trading, at far lower costs compared to L1. The two leading frameworks for L3 networks are Arbitrum Orbit and StarkNet appchains.

Arbitrum Orbit has seen significant adoption, with 38 live projects and 25 more in the pipeline. Gaming dominates the landscape, with notable chains like Xai and Pirate Nation. DeFi and social tokens have also found a home on Orbit.

StarkNet takes a different technical approach, relying on zero-knowledge proofs (ZK-STARKs) for validity verification. The SN Stack enables permissionless deployment of appchains, offering three flavors: the StarkWare Sequencer, Madara, and Dojo.