In the fast-paced world of blockchain, where innovation meets speculation, Helius CEO Mert (known on X as @0xMert_) recently shared some sharp insights on the challenges of building a payments-focused Layer 1 (L1) chain. His thoughts, posted in a thread on X, highlight the tension between controlled financial systems and the wild, permissionless nature of crypto. For those new to the term, an L1 chain is the base layer of a blockchain network, like Ethereum or Solana, handling core operations such as consensus and security.

Mert was responding to a clip from the TBPN podcast where he discussed Stripe's collaboration with Paradigm on their new Tempo L1 chain. Stripe, a giant in online payments, is aiming to create a blockchain tailored for fast, cheap transactions—think seamless cross-border payments without the usual crypto volatility. But as Mert points out, this "payments-only" vision might be a pipe dream.

The Allure of Launching Your Own L1

Mert kicks off by acknowledging that launching an L1 is a smart move for companies like Stripe. "If I were Stripe, I’d do the same," he says in the clip. Why? Owning the full stack means no more paying "rent" to other chains, plus you get massive distribution advantages. With Paradigm's backing—a top crypto VC firm—and a stellar team, it's a power play to dominate the payments space in web3.

But here's the catch: blockchains are inherently permissionless. That means anyone can build on them without asking for approval. Mert warns, "The moment you bring scalability into it, you’re in a different ballgame. A ‘payments-only chain’ doesn’t work. Blockchains are permissionless. Unless you restrict it, you’ll always get degens or someone launching Fart Coin."

For context, "degens" is crypto slang for degenerate gamblers—folks who chase high-risk, high-reward opportunities like meme coins. And Fart Coin? That's a tongue-in-cheek example of the absurd, viral tokens that pop up in the meme ecosystem, often driving massive speculation but little real utility.

Permissioned vs. Permissionless: The Core Dilemma

In his TL;DR, Mert breaks it down simply: Launching an L1 is objectively right if you believe you can win the race. However, a pure payments chain falls apart in practice. To keep things "payments-only," you'd need to either make the chain Turing incomplete (limiting what code can run, like Bitcoin) or permission blockspace—essentially deciding who gets to use the network.

But permissioned blockspace? That's more like traditional web2 systems (think centralized databases) than true blockchain. And if you ever flip the switch to full permissionless mode, boom—you're hit with the same performance bottlenecks that plague scalable chains today, like network congestion from spam or meme token launches.

Mert even floats an alternative idea in a reply: using a single sequencer Layer 2 (L2) with priority rules for payments. An L2 is a secondary layer built on top of an L1 for faster, cheaper transactions. This could potentially balance control and openness, but it's still unproven at scale.

Why This Matters for Meme Tokens

At Meme Insider, we're all about the chaotic, fun side of crypto—meme tokens. Mert's take underscores why meme coins thrive in permissionless environments. Chains like Solana (where Helius provides RPCs and APIs) have seen explosions in meme activity because anyone can deploy a token in seconds. Tempo's promise to "go permissionless later" sounds optimistic, but as Mert notes, that's easier said than done. Open the floodgates, and the degens rush in, launching the next Fart Coin or whatever viral sensation captures the crowd.

This isn't just theory. We've seen it play out on chains like Base or Pump.fun on Solana, where meme launches drive volume but also cause spikes in fees and slowdowns. For Stripe, aiming for stable payments, this could undermine their whole pitch.

Wrapping It Up

Mert's thread is a reminder that blockchain's superpower—permissionlessness—is also its Achilles' heel for specialized use cases. If you're building in crypto, especially around payments, you can't ignore the meme economy. It's not just noise; it's the heartbeat of on-chain activity.

Check out the full thread on X here for more details, including the podcast clip where Mert dives deeper.

Stay tuned to Meme Insider for more breakdowns on how meme tokens intersect with big crypto moves. Whether it's degens derailing payment chains or the next big launch, we've got you covered.