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Kyle Samani Questions Network Effects in Ethereum L2s: Implications for Meme Tokens

Kyle Samani Questions Network Effects in Ethereum L2s: Implications for Meme Tokens

In the fast-paced world of crypto, opinions from big players can stir up quite the conversation. Recently, Kyle Samani, Managing Partner at Multicoin Capital and a known Solana enthusiast, dropped a tweet that's got folks talking about Ethereum's Layer 2 (L2) solutions. If you're not deep into blockchain lingo, L2s are basically add-on networks built on top of Ethereum to make transactions faster and cheaper without clogging the main chain.

Samani's tweet was a direct response to a post by @materkel, who suggested that building a payment-focused L2 could outpace standalone Layer 1 (L1) blockchains because L1s miss out on Ethereum's network effects. Network effects, in simple terms, are when a platform gets more valuable as more people use it—like how Facebook became indispensable because everyone was on it.

But Samani isn't buying that for L2s. He tweeted: "there is 0 network effect between arbitrum and base there is no ~0 network effect between L2s. sharing DA means nothing." Here, "0" means approximately zero, so he's saying there's basically no shared benefit or synergy between popular L2s like Arbitrum (a rollup focused on scalability) and Base (Coinbase's Ethereum L2). He dismisses the idea that sharing Data Availability (DA)—the way these networks make transaction data accessible for verification—creates any real interconnected value.

This perspective aligns with Samani's broader critiques, where he's called L2s "parasitic" to Ethereum, siphoning value without truly contributing back. For context, check out the original thread on X and the quoted post here.

Now, why does this matter for meme tokens? A ton of meme coins thrive on L2s because of their low fees and quick transactions—think Pump.fun on Base or various degen plays on Arbitrum. If Samani's right and these L2s operate in silos with little cross-pollination, it could mean fragmented liquidity and user bases. Meme traders might find it harder to hop between ecosystems without bridges, which often come with fees and risks. On the flip side, this debate highlights why some prefer monolithic chains like Solana, where everything happens in one place, potentially offering stronger network effects for viral meme launches.

As blockchain tech evolves, views like Samani's remind us that scalability isn't just about speed—it's about building ecosystems that stick together. Whether you're a meme degen or a serious builder, keeping an eye on these discussions can help navigate the next big wave in crypto.

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