Are We Overlooking the Perils of Inferior L2s?

Are We Blind to the Risks of Subpar L2s?

Hey folks,

Remember that FTX mess? We all ignored the giant red flags because Sam Bankman-Fried looked smart and was raking in cash. Turns out, he was a clueless sociopath who stole our dough.

Well, the next crypto cycle is about to be even crazier, and Emin Gün Sirer, the co-founder of Avalanche, is worried about a flood of trashy layer-2 (L2) solutions. He's like, "Hey, don't be fooled again!"

What's the Beef with These L2s?

Sirer's got some red flags for you to watch out for. First up, beware of projects where the marketing hype doesn't match the tech. Like, if they're talking a big game about decentralization but using centralized sequencers without fraud protection, run for the hills.

Also, keep an eye on L2s that are just holding token sales to raise funds without a clear plan for how the tokens will be used to improve the network. That's a big no-no.

More Red Flags to Look For

Sirer says watch out for founders who dump their own tokens before the project even launches. That's like jumping ship before the Titanic hits the iceberg. And steer clear of projects with low-float tokens, which can be easily manipulated to inflate their value.

How to Spot the Good L2s

To find the real deal, Sirer suggests looking for projects that actually solve real problems in the crypto space. Like, can they make transactions faster, cheaper, and easier to use? If they're not solving anything important, be suspicious.

Don't Be a Victim of Hype

Remember, folks, don't fall for the hype again. Do your research, look for the red flags, and only invest in L2 projects that are legit and have a solid plan for the future. Let's not make the same mistakes we did with FTX.