The New Battleground: Layer 1 Shifts in Crypto

The article discusses the shift in the layer 1 (L1) conversation in the crypto market, where big companies are now building their own blockchains from scratch. This changes the decision-making process from tactical to strategic, as L1 is no longer a neutral playing field but rather a moat. Examples include Stripe's Tempo, a payments-focused L1 in partnership with Paradigm, and Coinbase's Base chain. The article concludes that crypto-native founders can't compete with corporate-controlled L1s regarding distribution and regulatory terms, but permissionless builders can compete on different vectors such as innovation and censorship resistance.

The cryptocurrency market is experiencing a significant shift in the conversation around Layer 1 (L1) blockchains, as major companies are now building their own blockchains from scratch. This development changes the decision-making process from tactical to strategic, as L1 is no longer a neutral playing field but rather a competitive moat. Companies like Stripe and Coinbase are leading the charge with initiatives like Tempo and Base chain, respectively.

Stripe's Tempo, in partnership with Paradigm, and Coinbase's Base chain are examples of corporate-controlled L1s that aim to integrate blockchain technology into their core operations. These initiatives represent a strategic move to control the infrastructure of their ecosystems, providing them with a competitive edge in terms of distribution and regulatory terms.

However, this shift presents challenges for crypto-native founders. While corporate-controlled L1s have significant advantages in terms of resources and reach, they also face regulatory scrutiny and potential censorship. This dynamic creates an uneven playing field, where traditional crypto-native founders may struggle to compete.

Permissionless builders, on the other hand, can compete on different vectors such as innovation and censorship resistance. The recent partnership between Halborn and VerifiedX demonstrates this strategy, with Halborn, an award-winning blockchain cybersecurity firm, joining forces with VerifiedX to enhance the security and audit integrity of the VerifiedX protocol, as reported in The CoinRise article The CoinRise article. This collaboration emphasizes the importance of security and transparency in a decentralized ecosystem, areas where permissionless builders can excel.

Hyperliquid's HIP-3 upgrade is another example of this trend, enabling permissionless perpetual futures markets and boosting decentralization and the value of the HYPE token, according to a LiveBitcoinNews report LiveBitcoinNews report. This move opens up new opportunities in decentralized finance (DeFi) and allows developers more freedom to create markets without central authority approval.

In conclusion, the shift in the L1 conversation highlights the strategic importance of blockchain infrastructure. While corporate-controlled L1s have significant advantages, permissionless builders can compete by focusing on innovation and censorship resistance. The crypto market is evolving, and the landscape is becoming more complex, but it also presents new opportunities for those who can adapt and compete on different vectors.