Layer 2 Blockchains Are Built on a Lie, Says Ayre Ventures’ Paul Rajchgod

Layer 2 blockchains are all the rage in the “crypto” ecosystem, hitting over $13 billion in overall market cap. However, Paul Rajchgod believes they are all built on a lie.

Layer 2 blockchains have exploded in popularity within the “crypto” space, collectively hitting over $13 billion in total market cap. However, Paul Rajchgod believes that they are all built on a lie.

Rajchgod, the managing director of Ayre Ventures, attended the London Blockchain Conference, where he moderated a panel that dove into investing in Web3, the use of blockchain in various industries, and Layer 2 blockchains.

“I have a thesis that the whole premise of Layer 2 is built on a lie, and that lie is that Layer 1 wasn’t scalable. Layer 1 means using the blockchain itself and not building outside the blockchain,” Rajchgood told CoinGeek Backstage host Becky Liggero on the sidelines of the event.

Layer 2s are off-chain networks that are built on top of blockchain networks to supposedly improve qualities such as scaling, speed, or reducing costs. They are typically created due to an inability of the base networks to evolve to meet the changing needs of the users, with a lack of scale being the most common.

“Other blockchains are not scalable enough, and I believe that’s why they have had to figure out, ‘Well, we’ll do a Layer 2 thing,'” he said.

BSV scales unbounded to meet enterprise needs, making it the ideal blockchain network for applications that target millions of users, from games and social media platforms to government and enterprise services. With the Teranode upgrade later this year, BSV will process over a million transactions per second, making it the most scalable decentralized network in the world and eclipsing the throughput of most centralized competitors.

At the London Blockchain Conference, several of Ayre Ventures’ portfolio companies took to the stage to give updates on their products and services. According to Rajchgod, most have already onboarded paying clients who they are helping to build on Bitcoin, including MintBlue, Gate2Chain, and Buzzmint.

One of the key aims of the conference is to connect blockchain leaders and enthusiasts with decision-makers from the enterprise and government sectors. Rajchgod revealed that the event delivered on this objective, with Ayre Ventures involved in dozens of meetings on the sidelines that were geared towards strong partnerships which could push blockchain adoption.

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