Why L2 Tokens Must Capture Value Beyond Sequencing Fees

Sequencing is a low-margin, permissioned service vulnerable to forks and centralization pressure. Its value is purely extractive, not accretive to the token.

• Revenue Volatility: MEV & fee revenue fluctuates with chain activity, creating an unstable cash flow.
• No Protocol Lock-in: Users don't choose an L2 for its sequencer; they choose for its apps and liquidity.
• Centralization Risk: Single sequencers create a single point of failure and censorship, undermining decentralization narratives.

Mandate the L2 token as the sole collateral for critical network services, creating a circular economy and hard utility.

• EigenLayer & Restaking: Use the token as a canonical restaking asset to secure AVSs like decentralized sequencers, fast finality bridges, or oracles.
• Base Layer Security Contributions: Allocate a portion of staking yield to fund Ethereum consensus staking or DVT node operations, aligning L2 health with Ethereum's.
• Slashing for Guarantees: Enforce service-level agreements (e.g., uptime, censorship resistance) via slashing, making security a sellable product.

Become the canonical money layer for your ecosystem by embedding the token into core economic loops, similar to how BNB powers BSC.

• Gas Token Abstraction: Subsidize or discount fees for users paying with the native token, creating constant buy-side pressure.
• Liquidity Hub of Record: Mandate the token as the primary pairing asset in native DEXes (e.g., a Uniswap V3 pool) and as collateral in lending markets like Aave.
• Cross-Chain Settlement: Use the token as the preferred collateral for native intent-based bridges (e.g., Across, LayerZero) and cross-chain messaging.

Move governance beyond parameter tweaks to direct control over substantial, yield-generating treasury assets and protocol fees.

• Treasury Diversification: Governance directs a protocol-owned treasury (e.g., Optimism's RetroPGF, Arbitrum DAO) to invest in ecosystem grants, liquidity mining, and strategic asset acquisition.
• Fee Switch Authority: Token holders vote on activating and distributing a share of sequencer/MEV revenue back to the treasury or stakers.
• Canonical Service Selection: Governance selects and slashes providers for decentralized sequencer sets, oracles (Chainlink, Pyth), and data availability layers (EigenDA, Celestia).

Centralized sequencers create a single point of failure and capture minimal value. Decentralized, shared sequencers like Espresso and Astria turn sequencing into a competitive marketplace.

• Shared Security: Sequencers post bonds, slashed for liveness failures.
• Cross-Rollup Composability: Enables atomic cross-rollup transactions, a new primitive.
• Fee Capture: Token stakers earn fees from multiple rollups, not just one.

A monolithic L2 token is weak. A Superchain of interoperable L2s (Base, Optimism, Zora) creates a sovereign economic zone.

• Protocol Revenue: A fee switch on all chain activity, redistributed to OP Stack contributors.
• Interop Premium: Native, trust-minimized bridging within the stack increases utility and lock-in.
• Governance Scope: Token governs technical upgrades and treasury for the entire ecosystem.

Proving computational integrity is the core resource sink for validity rollups. Starknet's plan to decentralize its prover creates a verifiable compute market.

• STRK Staking: Provers must stake tokens to participate, securing the network.
• Fee Auction: L2s and dApps pay for proof generation, with fees distributed to stakers.
• Value Capture: Token captures value from the most computationally intensive layer, not just ordering.

If EVM execution is a commodity, own the next virtual machine. Stylus allows Rust, C++ smart contracts to run alongside the EVM, capturing developer mindshare.

• Performance Tax: Stylus contracts pay a premium for faster execution, captured by the protocol.
• Ecosystem Tax: New languages attract non-crypto devs, increasing total addressable developers.
• Infrastructure Moats: Validators must support new VMs, increasing staking utility.

EIP-4844 blobs are a new, scarce resource. L2s that natively tokenize and manage their blob commitments (like Mantle) create a direct link to Ethereum's data layer.

• Resource Bonding: Token used to reserve and pay for future blob space, ensuring L2 survival.
• Derivative Markets: Enables futures and insurance markets on data availability costs.
• Sovereign DA: A path to a dedicated DA layer with its own staking economics.

Forcing every app-chain to use the same data availability layer is inefficient. zkSync's Hyperchains can choose any DA layer (Ethereum, Celestia, EigenDA), with the ZK token as the universal bond.

• Universal Security Bond: ZK staked to secure the bridge between any configured Hyperchain and Ethereum.
• DA Orchestration: Token facilitates payments and slashing across heterogeneous DA providers.
• Meta-Governance: Governs the upgrade path for the entire zkSync ecosystem state transition.

Native sequencers currently capture the majority of MEV and priority fees, leaving the L2 token as a governance-only instrument. This creates a fundamental misalignment where the most valuable cash flow bypasses the token.

• Example: A sequencer can extract $1M+ daily in MEV on a major L2.
• Result: Token accrual is limited to a small, fixed sequencing fee, capping its economic upside.

Protocols must hardcode economic mechanisms that direct value flows—like MEV, transaction fees, or bridge revenue—into the token. This transforms the token into a productive asset.

• Arbitrum's Stylus: Potential to tax WASM runtime fees and burn ARB.
• zkSync's Hyperchains: Could mandate fee sharing to the L1 settlement token.
• Goal: Create a protocol-owned treasury funded by network activity.

Successful value capture models exist at the application layer. L2s should emulate mechanisms from Uniswap (fee switch), Frax Finance (protocol-owned veFXS liquidity), or EigenLayer (restaking slashing).

• Action: Implement a burn-and-mint equilibrium based on sequencer profit.
• Action: Use the token as collateral for native stablecoins or insurance pools.
• Result: Token demand becomes tied to core utility, not speculative governance.

The rise of shared sequencer networks like Espresso, Astria, and Radius will commoditize block production. An L2 that outsources sequencing loses its primary fee capture point.

• Implication: Value must be captured at the settlement or DA layer.
• Defense: Integrate value capture into proof verification fees or data availability attestations.
• See: How Celestia and EigenDA are positioning as value-accruing base layers.

Valuation must shift from 'number of chains' to analyzable, on-chain cash flows directed to the token. Tokens without clear accrual are governance wrappers on a commoditized service.

• Metric: Fee Revenue / Token Supply.
• Red Flag: A roadmap that discusses only TPS and cost, not token utility sinks.
• Bull Case: A token that acts as a native yield-bearing asset within its own ecosystem.

1. Audit Cash Flows: Map all value streams in your stack (MEV, fees, bridging).
2. Propose Hard Forks: Advocate for protocol changes that redirect a percentage to a treasury/burn.
3. Build Native Primitives: Develop applications that require the L2 token as core collateral or payment.
4. Pressure Competitors: Use superior tokenomics as a business development tool to attract dApps and liquidity.

• Precedent: Optimism's RetroPGF is a start, but it's philanthropic, not economically binding.