When to choose an L2 vs an appchain

One of the most common questions we get from teams is whether they should deploy on an L2 or build their own appchain. The answer depends on several factors that we'll explore in this post.

L2s like Arbitrum, Optimism, and Base offer the fastest path to market. You get instant access to existing liquidity, users, and infrastructure. For most applications, this is the right choice. The shared security model means you don't need to bootstrap your own validator set.

However, L2s come with tradeoffs. You share blockspace with other applications, which can lead to unpredictable gas costs during high-demand periods. You also have limited control over transaction ordering and MEV.

Appchains make sense when you need complete control over your execution environment. High-frequency trading applications, games with specific throughput requirements, or protocols that need custom precompiles are good candidates.

The economics are different too. On an L2, you pay fees to the network. With an appchain, you capture all the fees but need to cover your own infrastructure costs. This usually only makes sense at significant scale.

Our recommendation: Start on an L2, prove product-market fit, then consider migrating to an appchain if you hit specific bottlenecks. The appchain ecosystem is maturing rapidly with solutions like OP Stack and Arbitrum Orbit making deployment easier.