Enterprise Self-built L1 Blockchain: The Trend Behind Its Rise

Recently, a well-known payment giant announced a collaboration with a certain crypto venture capital to jointly develop an L1 Blockchain called "Tempo". This high-performance blockchain, focused on payments, aims to serve the company's large customer base.

This action is not an isolated case, but rather marks the beginning of an emerging trend—large enterprises are beginning to refocus on and build their own L1 Blockchain. It is reported that many companies, including some Fortune 500 companies, are currently considering launching their own L1 Blockchain.

So, why have mature enterprises rekindled their interest in building their own Blockchains after years of silence in the enterprise-level Blockchain space? More importantly, why do they prefer L1 Blockchains?

The Main Reasons for the Return of Enterprise Blockchain

1. The Maturity of Stablecoins

Nowadays, most finance teams are no longer unfamiliar or fearful of stablecoins. With certain stablecoin issuing companies planning to go public and the introduction of relevant regulatory policies, stablecoins are seen as a safe and highly potential technology. It can help businesses reduce costs, streamline operations, and gain more returns from cash reserves or customer deposits. Many large companies are building infrastructure for holding and circulating stablecoins. In addition, several countries, including the United States and Japan, are actively promoting stablecoin regulation, and the overall environment is moving in a favorable direction.

2. The focus shifts from traceability to payment.

In the previous enterprise Blockchain boom, most application scenarios were concentrated in the traceability field, such as tracking the use of raw materials in the supply chain or charitable funds. However, these scenarios could technically be fully implemented through traditional databases; the only issue is trust.

Nowadays, when communicating with businesses, it is found that regardless of the industry they belong to, their primary concern is almost focused on the payment sector. Currently, most B2B and B2C payment service providers charge high fees to merchants and businesses, with settlement taking several days and actual settlement risks existing. Once cross-border or foreign exchange transactions are involved, these issues become more pronounced. For multinational companies (especially those similar to shared economy platforms), building their own blockchain-based payment solutions can save billions of dollars and provide a better experience for customers, employees, and gig workers.

Why Choose to Build L1 Instead of L2 or Smart Contracts

1. L1 technology has matured and is well known to decision makers.

After more than a decade of development, L1 as a technology platform has been fully understood and validated. Most non-crypto industry professionals are likely to recognize Blockchain as L1 (some emerging projects may be exceptions). A single Blockchain technology has already supported over 200 chains, covering various fields, with a total asset value exceeding $70 billion. In the past year, the largest new projects have further consolidated this landscape. Moreover, the most successful enterprise-level Blockchain itself is also L1.

In contrast, while L2 is exciting, it is still in its early stages and difficult to understand. Decision-makers in mature enterprises are often reluctant to take risks on emerging platforms. Entering the crypto space is already a significant risk, so it is essential to choose the most understandable approach for stakeholders.

2. Reduce platform risk

Most companies are reluctant to bet on certain specific public chains and prefer to rely solely on themselves. Building an L1 is the best way to achieve this goal. Large enterprises often use multiple cloud service providers to avoid single vendor risks, and in their view, the risks of certain well-known public chains are much higher than those of these traditional partners.

3. The balance of control and connectivity

An open and transparent L1 provides enterprises with the ability to interconnect with a broader cryptocurrency ecosystem while maintaining autonomous control over the platform. L2's interoperability with other chains relies on third parties and is often constrained by fraud/zero-knowledge proof windows and the slow finality confirmations of certain public chains, leading to settlement delays. L1 does not have this issue; settlements are instant and deterministic, maintaining consistency in interoperability. This feature, combined with the ability to build a proprietary "walled garden" and implement necessary KYC/AML and application logic within it, will be highly attractive.

As more and more enterprises begin to explore the possibility of building their own L1 Blockchain, we may be witnessing the beginning of a new wave of technological innovation. This will not only change the way businesses operate but could also have a profound impact on the entire fintech ecosystem.