When it comes to building AI-focused blockchain projects, a key question often arises: should developers build on their own Layer 1 (L1) networks, or should they leverage Layer 2 (L2) solutions on existing blockchains like Ethereum? On Thursday, Binance’s co-founder Changpeng Zhao (CZ) stirred up a conversation about this very dilemma on social media platform X.
His thoughts? While it’s tempting to build a new L1 for more sovereignty and decentralisation, L2 solutions may provide all the tools developers need without the heavy lifting.
But which one should AI projects choose in 2025? Let’s dive into the debate and examine the pros and cons of each approach.
What Are Layer 1 and Layer 2 Blockchain Solutions?
Before diving into the specifics, let’s break down the core differences between L1 and L2 solutions for blockchain projects.
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Layer 1 (L1): These are independent blockchains like Bitcoin and Ethereum that manage their own transactions, security, and consensus. L1s require their own infrastructure, including nodes, validators, and miners, and often struggle with scalability as user demand increases.
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Layer 2 (L2): These solutions are built on top of L1 blockchains, helping to offload transaction processing to reduce congestion and transaction fees. L2s process transactions off-chain and settle them on the main blockchain, offering scalability without the need for additional infrastructure.
CZ’s Perspective: Sovereignty vs. Practicality
In his post, CZ raised an important point: while building an L1 may provide sovereignty (meaning control over the blockchain), it also brings added complexity. Developers will need to manage consensus mechanisms, validators, and security.
On the other hand, L2s save developers from this hassle, allowing them to tap into the existing blockchain ecosystem without worrying about infrastructure. L2s also benefit from the community and tools already established on the L1, offering a much smoother entry into the blockchain space.
The Community’s Reaction: Decentralisation or Convenience?
The conversation quickly attracted responses from various members of the blockchain community, each providing unique insights. Some were quick to point out the advantages of L2s in terms of decentralisation.
Silent Capital’s Take: L2 for Decentralisation
One account, Silent Capital, argued that L2s actually leverage decentralisation by tapping into the security and consensus of existing L1s. By using L2s, developers gain access to the infrastructure and community built into platforms like Ethereum without having to go through the effort of building an L1 from scratch.
In Silent Capital’s view, L2 solutions provide decentralisation by default, as they operate under the umbrella of a larger, established L1. Plus, there’s no need to worry about managing a network of validators, which can be challenging for newer projects.
Clytheronix: L1 for Decentralisation, but More Complex
Clytheronix, a marketing researcher, agreed that L1s tend to be more decentralised but warned that they are far more complex to build and maintain. For a project focused on AI, which requires high computational power, an L1 might offer more control over consensus mechanisms and better scalability.
The Case for Layer 1: Sovereignty and Optimisation
While L2s offer simplicity, there are valid arguments for why L1 blockchains may be the better choice for certain projects, especially AI-focused ones.
MatrixAI’s Perspective: Optimising AI Workloads
According to Sercan Muslu, the head of the MatrixAI community, L1 networks provide sovereignty that can be key for AI applications. With L1, developers can tailor the consensus mechanisms to meet the high computational needs of AI workloads, which many L2s aren’t built to handle.
L1 projects allow for deeper integration with AI models, which can lead to better performance, scalability, and security. For AI-driven blockchains, optimisation is key, and this is often easier to achieve with full control over the network.
Layer 1 or Layer 2: Which is Better for AI Blockchain Projects?
It ultimately comes down to the goals of the project. Is decentralisation a priority? Or is it about getting to market faster and using existing blockchain tools and networks?
Here’s a breakdown of when you should consider L1 vs L2:
Consider Layer 1 if:
- You need full sovereignty and control over the blockchain.
- Your AI workloads require custom consensus mechanisms or high optimisation.
- You want to create a new ecosystem for your project, complete with its own security and infrastructure.
Consider Layer 2 if:
- You want to leverage the existing infrastructure of a well-established L1 like Ethereum.
- Your focus is on speed and scalability, especially for AI projects.
- You’re looking to save time by not building everything from scratch.
- You want to lower costs by using the L2 scaling solutions for Ethereum or another L1.
The Business Side: Making the Right Strategic Choice
On a more strategic level, the decision may come down to business goals. As Marco Tonetti, a music artist and crypto enthusiast, put it, L2s might be the best choice if you’re focused on building a product or service. L1s, on the other hand, may be more suitable for gambling your luck and aiming for quick riches. This statement underscores the importance of business focus when making a choice between the two.
For AI blockchain projects, it’s crucial to think about how AI will interact with the blockchain. Does it need full control over the network for optimised AI computations? If so, L1 may be the better option. However, if the project’s primary goal is to scale quickly and leverage the tools already available, L2 could be the way to go.
Conclusion: L1 or L2 for AI Blockchain Projects?
The decision to build on L1 or L2 isn’t straightforward and depends on various factors, such as the project’s technical needs, decentralisation requirements, and scalability goals.
L1s offer more control and sovereignty, making them ideal for AI-focused projects that need custom optimisation and deep integration. However, L2s provide convenience, tapping into the decentralisation and security of established blockchains like Ethereum, which can be advantageous for faster time-to-market and cost-efficiency.
As CZ pointed out, the decision should be made based on the project’s goals, and there’s no one-size-fits-all answer. So, whether you opt for the sovereignty of L1 or the convenience of L2, each option has its merits.
Photo credit: Cryptopolitan
