Key Takeaways
Stripe’s payment-focused Tempo chain shall be an L1 and never an Ethereum L2 as beforehand thought. Will the shift dent Ethereum’s long-term market share within the stablecoin and tokenized market?
Stripe has unveiled Tempo, a brand new payments-first L1 blockchain in collaboration with Paradigm. In soing so, it has formally joined Google within the race for next-generation stablecoin rails.
Tempo was initially rumored to be an Ethereum [ETH] L2, just like the Robinhood chain. Nonetheless, it will likely be a standalone community that makes use of stablecoins for fuel charges, with help for autonomous AI brokers.
For his half, Stripe CEO Patrick Collison has billed the chain as “optimized for high-scale, real-world monetary providers functions.”
In keeping with the exec, current blockchains are usually not optimized for rising stablecoin traction within the Stripe ecosystem. Specifically, he cited low throughput and consumer expertise as the explanations for not avoiding the L2 route.
“It’s helpful for real-world monetary functions that charges be denominated in a fiat forex that is smart to the consumer, however current blockchains denominate their charges in blockchain-specific tokens.”
Supply: X
Bother for Ethereum L2s?
Apparently, the community strives to serve broader use instances, together with AI agent funds and tokenized deposits. Collison added,
“We hope that Tempo makes it simpler for issues like fee acceptance, world payouts, remittances, microtransactions, tokenized deposits, agentic funds, and extra, to maneuver onchain.”
That is precisely what Ethereum and L2s’ scaling imaginative and prescient are anticipated to seize. Nonetheless, with the upcoming competitors, together with from Google’s GCUL, its market share might be eaten by new gamers with massive distribution networks.
In reality, Tushar Jain, Co-founder of crypto VC Multicoin Capital, claimed the replace was bearish for L2s.
“The start of the top for L2s”
The same place was echoed by crypto investor Jon Charbonneau. He added,
“The fellows with the most important ETH baggage are actually constructing their very own L1, & folks nonetheless assume Ethereum being the “settlement layer for the web of worth” is a coherent thought.”
For Chuk Okpalugo, Product Lead at stablecoin issuer Paxos, Tempo has been positioned as decentralized and its various companions make it the “one to look at.”
“TEMPO has the options, the companions, and the permissionless narrative. The problem is companion coordination, however Stripe’s distribution might overcome the chilly begin and convey others alongside. One to look at!”
In the meantime, the general market sentiment round Ethereum dropped barely after the announcement.
Will probably be fascinating to see how ETH buyers react. Particularly when these new competing blockchains change into operational within the subsequent few months.
Supply: Santiment
