The Rise of Sovereign dApps
The “sovereign dApp” is setting in motion a major shift in the crypto economy, as some of crypto’s most successful dApps opt for their own independent chain.
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TLDR
- Highly successful dApps are increasingly opting to launch sovereign blockchains, bypassing reliance on general-purpose L1 ecosystems.
- Hyperliquid built its own full-stack L1, attracting liquidity from other crypto ecosystems. Currently, 58% of USDC on Arbitrum stems from crypto users utilizing Arbitrum as a bridge to Hyperliquid.
- TradFi players favor more-centralized, compliant sovereign chains over Ethereum’s decentralized, fee-driven, governance-heavy environment. Ethena's launch of Converge is clear evidence of this.
- General-purpose L1s risk becoming low-value infrastructure while app-specific chains capture meaningful value. However, general-purpose L1 teams are aware of this issue, and are attempting to address it.
