Binance Founder Changpeng Zhao Spotlights L1 Vs. L2 Impact On AI Projects

Binance founder Changpeng Zhao has recently shared vital insights on the impact of L1 vs L2 for AI projects looking to venture into the blockchain industry. In an X post this Thursday, CZ cracked on how AI projects could leverage two branches of the same tech differently. Notably, L1 offers sovereignty whilst L2 offers efficiency, a topic of constant debate across the broader sector.

Binance Founder Spotlights Impact Of L1 vs L2 Capabilities On AI Projects

In his X post on March 6, CZ tapped into the question: “Does it matter if a new AI project is an L1 or an L2?” The Binance founder revealed that the ultimate goal for an AI project is to leverage blockchain in aiding with better AI economics rather than the project core being used to develop a better blockchain.

L1 vs L2 Saga: Here’s What To Know

“Having your own L1 feels like you have more sovereignty, more decentralization,” CZ added. However, this also paves the way for a lot more effort in regards to nodes, validators, etc, indicating more computational and financial load.

On the other hand, L2 eliminates “all that work,” CZ stated. This statement indicates that the utilization of L2s eliminates all computational and financial costs, unlike L1s. Moreover, the Binance founder also spotlights how users can enjoy benefits such as decentralized exchanges (DEXs), perpetual futures (perps), and other existing DeFi tools.

CZ concluded by saying, “Is L1 cooler than L2 or the reverse? Old topic, but wondering if sentiment has changed or not,” setting off waves of discussions across the broader sector.

CZ Offers Advice Amid Recent Market Turbulence

On the other hand, Changpeng Zhao took the stage to offer investment advice amid the recent market dip.

Intriguingly, rather than offering investors assurance, the Binance founder urged market participants to reduce their investment sizes if the dips seemed worrying. “Dips are a part of free markets,” CZ added, while also rationalizing the broader volatility.

For context, the crypto market saw a bloodbath in February, attributable to macro heat and liquidity hurdles. Nevertheless, Bitcoin and Altcoin prices recovered as March kicked off, aligning with Donald Trump’s U.S. crypto reserve and crypto summit plans. Traders and investors stay on their toes amid broader developments while CZ continues to spark buzz market-wide with his comments.

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