The Inescapable Economics of Blockchains
Imagine trying to bootstrap sustained network effects on a Layer 1 (L1) blockchain. You have an initial token allocation for incentives, but funding long-term growth and R&D becomes a constant struggle when the protocol itself generates limited recurring revenue for the core foundation. This isn't a hypothetical, it's the harsh economic reality driving a significant trend: established L1s, some previously vocal critics of Ethereum's limitations and its rollup-centric roadmap, are now strategically embracing that very vision by deploying rollup solutions on Ethereum. Why the change of heart? As the crypto market matures and is forced to compete on sustainable economic models, the gravity is pulling the industry towards efficiency.
Ethereum, as the first major smart contract platform to reach widespread adoption, confronted scaling years ago. Out of necessity, it embarked on a path focused on preserving decentralization and security, deliberately avoiding simpler fixes like infinite block sizes. This foresight led to the rollup-centric roadmap, a strategy designed not only for scaling but also for flexibility, allowing each rollup to customize its environment for specific user needs (like gasless gaming transactions or KYC-enabled finance for institutions).
Meanwhile, some alternative L1s prioritized raw speed or novel consensus mechanisms over proven security. This approach led to challenges: some faced catastrophic security events like the Terra collapse (driven partly by flawed economic incentives), while others struggled to generate sustainable economic activity, resulting in lower token demand and weakened economic security. Now, the trend is reversing, with projects strategically choosing to leverage Ethereum's robust economic security, and its carefully considered scaling approach via rollups.
This strategic shift is exemplified by projects like XPLA. Originally a successful Tendermint/Cosmos-based L1 focused on gaming and digital content, XPLA recognized the compelling advantages of the rollup model. Partnering with Caldera, they are launching zkXPLA, a high-performance rollup built using zkSync's ZK Stack, expanding their ecosystem capabilities, while continuing to support their vibrant L1.
Whether an L1 project is considering a full migration or a strategic expansion, deploying a rollup on Ethereum with Caldera offers a powerful trifecta of benefits:
Economic Efficiency: Dramatically optimizing operational costs and unlocking sustainable revenue models for reinvestment.
Network Growth: Overcoming isolation through interoperability and enabling specialized chain configurations.
Ecosystem Alignment: Tapping into Ethereum's unparalleled network effects, community, and market reach.
Caldera, as the leading rollup deployment platform, is ready to facilitate the growing number of transitions. Our platform powers over 100 rollups, which have collectively processed over 410 million transactions and served nearly 12 million unique wallets (as of April 2025). This proven infrastructure, including The Rollup Engine and The Metalayer, is designed to amplify the benefits for projects making the strategic shift from standalone L1s.
XPLA: The Universal Content Powerhouse
XPLA stands out as a prime example of an established L1 embracing the rollup future. Built on Tendermint and leveraging the Cosmos SDK for interoperability within its native ecosystem, XPLA carved out a niche as a hub for digital media content, particularly focused on gaming. Guided by "Play to Own" principles, XPLA aimed to build a sustainable blockchain gaming ecosystem, attracting notable titles like The Walking Dead: All-Stars, Summoners War: Chronicles, and Ace Fishing: Crew. Their L1 provided game-specific SDKs and EVM compatibility to help developers bridge Web2 games into the Web3 space.
Recognizing the need for enhanced scalability, cost-efficiency, and deeper integration with the broader Ethereum landscape, XPLA made the strategic decision to expand its offerings by launching zkXPLA. This initiative involves deploying a high-performance, sovereign rollup using zkSync's cutting-edge ZK Stack technology, facilitated by Caldera's Rollup Engine. This move allows XPLA to offer developers application-specific rollups with L1-grade security inherited from Ethereum, while maintaining interoperability through shared bridging infrastructure like The Metalayer.
This expansion highlights XPLA's commitment to providing a "universal content powerhouse." By adding a ZK-rollup capability alongside their existing Tendermint chain, they can offer diverse environments tailored to different needs within their ecosystem. Their established L1 presence is further bolstered by strong industry partnerships; notably, global gaming giant Ubisoft serves as a validator for the XPLA L1 network. This collaboration not only enhances network security but also signals strong confidence in XPLA's vision for the future of Web3 gaming and content, blending the stability of their L1 with the scaling potential of Ethereum rollups.
Escaping The L1 Tax
Switching to a rollup fundamentally reworks an L1’s balance sheet. Running an L1 involves significant responsibilities, analogous to managing a mainframe in the early internet era. It requires overseeing consensus, nurturing a validator set, and funding token incentives—a resource-intensive undertaking with security costs potentially running into the tens of millions each year (Celo reportedly spent 4-6% of annual token emissions, approximately $15M-$25M USD). These costs represent significant operational overhead, often referred to as the "L1 tax."
Another important economic challenge facing standalone L1s is capturing enough value to fund ecosystem growth. In typical Proof-of-Stake L1s, both network transaction fees and newly minted tokens (inflationary rewards) flow directly to stakers and validators as compensation for securing the network. This unfortunately leaves limited revenue for the protocol’s foundation to pay the team’s salaries, fund new R&D, ecosystem grants, or other long-term growth initiatives from protocol operations alone. L1s are valuable platforms with multi-billion dollar valuations, yet the economic incentives can hinder sustainable funding for long-term evolution.
In contrast, adopting a rollup strategy introduces significantly more economic flexibility, akin to shifting from a dedicated mainframe to efficient hosted servers. Rollups inherit Ethereum's robust security at a significantly lower marginal cost, primarily consisting of state commitment and data availability fees (optimizable via compression or alternative DA layers). This transition unlocks significant economic efficiency. Projects can optimize infrastructure overhead and operational complexity by leveraging Ethereum's security for their rollup, effectively shedding the "L1 tax" associated with maintaining independent consensus.
This enhanced efficiency allows projects to:
Capture and Reinvest Revenue: Rollups can often retain revenue from sequencer fees and MEV. This revenue can be directly reinvested into innovation, developer grants, and user incentives, fostering a sustainable growth cycle (mirroring models like Optimism's Retroactive Public Goods Funding).
Optimize Focus & Resources: Free up capital and engineering talent previously focused on L1 consensus, security, and full-stack infrastructure management. This allows teams to concentrate resources on core product development, application-layer innovation, and driving ecosystem adoption, rather than managing complex infrastructure.
Reduce Reliance on Inflation: The combination of lower operational costs (shedding the "L1 tax") and potential direct revenue capture (sequencer fees, MEV) means projects may need to rely less on high token inflation to incentivize network participation and bootstrap growth compared to the traditional L1 model. This leads to more sustainable tokenomics.
Caldera’s Rollup Engine facilitates this efficient deployment, while The Metalayer directly addresses the network growth challenges posed by interoperability hurdles, connecting rollups seamlessly.
Beyond Walled Gardens
Historically, both standalone L1s and early rollups have suffered from ecosystem isolation. Just as new rollups struggled to bootstrap network effects without seamless connectivity, many L1s operate as digital islands, finding it difficult to attract and retain liquidity, users, and developers from other ecosystems. This "fractured state" of blockchain interoperability stems from slow, cumbersome, or insecure bridging solutions, incompatible wrapped token standards that fragment liquidity, and complex user experiences requiring multiple hops across platforms. This isolation hinders growth and prevents the realization of a truly interconnected blockchain network.
Deploying a rollup on Ethereum through Caldera offers a multi-layered solution to this challenge. Firstly, by building on a specific framework like Arbitrum Orbit, OP Stack, or ZK Stack, a Caldera-deployed rollup instantly becomes part of that framework's native ecosystem (e.g., Arbitrum Orbit, Optimism Superchain, or zkSync's Elastic). This provides baseline interoperability and access to users and assets within that specific "walled garden."
However, Caldera goes a step further with The Metalayer. Automatically integrated with every Caldera chain from day zero, The Metalayer acts as a universal interoperability network on top of the framework-specific solutions. It bridges the gaps between these walled gardens, connecting rollups across different stacks (e.g., enabling seamless interaction between an OP Stack rollup and a ZK Stack rollup). The Metalayer achieves this through:
Intent-based bridging: Using partnerships (Across, Eco, Relay) to find optimal paths for user requests.
Fast message passing: Utilizing protocols like Hyperlane for settlement, enabling near-instant communication.
Multi-chain reads: Allowing cross-chain dApps to query state across the network.
A unified developer toolkit: Simplifying interop for builders.
This combined approach, leveraging both native stack interoperability and Caldera's Metalayer, provides the most comprehensive solution to the cold start problem. As more chains join, liquidity deepens across the entire network, asset movement becomes frictionless, and developers can build applications that tap into a much broader ecosystem. Caldera also manages bridging upgrades and integrates new technologies, ensuring projects remain at the forefront of connectivity without technical overhead.
Beyond interoperability, rollups unlock specialization. General-purpose L1s must cater to broad needs. Rollups, however, can be purpose-built for a single application in mind using Caldera's Rollup Engine for deep customization. Consider these examples:
Gaming Chains (like B3): Can be configured to be gasless, or with custom gas tokens (like $XPLA on zkXPLA) for frictionless onboarding and high throughput.
RWA Chains (like Clearpool’s Ozean): Can implement unique chain-native mechanisms, such as their ozUSD stablecoin’s auto-rebasing yield.
DeFi Chains (like Kinto): Can integrate chain-level KYC or features optimized for trading.
This layered design allows projects to benefit from Ethereum’s security for the rollup while tailoring the environment. For XPLA, this meant choosing zkSync's ZK Stack for its performance and sovereignty features, suitable for gaming and content. The Rollup Engine enables these specialized rollups, while The Metalayer prevents siloing, fostering a dynamic network.
Aligning with Ethereum’s Ecosystem
Choosing to deploy a rollup on Ethereum also implies a strategic alignment with the industry's largest ecosystem. Ethereum's rollup-centric roadmap is materializing: rollups handle 13x mainnet transaction volume, secure $35B+ in TVL, and tap into Ethereum's $100B+ DeFi economy.
This alignment provides more than just technical and liquidity advantages:
Vast Community: Access to Ethereum's massive and mature developer, user, and researcher base.
Marketing Reach: Amplified visibility, credibility, and media attention within the Ethereum ecosystem.
Talent & Partnerships: Easier access to skilled builders and strategic collaborations.
Regulatory Familiarity: Leveraging Ethereum's established presence with institutions and policymakers.
Caldera facilitates this alignment by enabling deployment across major ecosystems settling on Ethereum (Arbitrum One, Base, OP Mainnet, ZKsync Era). By launching zkXPLA through Caldera, XPLA strategically positioned their rollup expansion within this thriving ecosystem, bootstrapping network effects and marketing reach, complementing their strong, established foundation on Cosmos.
The Future is a Constellation of Rollups
The strategic shift towards Ethereum rollups offers L1 projects a clear path forward, driven by compelling economics, enhanced connectivity, and alignment with the industry's largest ecosystem. As exemplified by XPLA's successful launch of zkXPLA, Caldera provides the essential infrastructure to navigate this evolution.
Our experience deploying over 100 rollups for diverse applications including NFTs (Rari), AI (BluWhale’s Oceanum), and DePIN (Huddle01) demonstrates our capability to support projects seeking efficiency and growth. With the Rollup Engine for customizable deployment and The Metalayer for seamless interoperability, Caldera is committed to enabling a future of 10,000 interconnected, specialized rollups scaling Ethereum for the next billion users.
Whether your L1 project is planning a full migration or a strategic expansion, Caldera offers the tools and expertise to launch a high-performance rollup tailored to your individual blockchain’s needs. Visit our deployment page today to explore the benefits and join us in building the future of the decentralized internet.
About Caldera
Caldera is one of the fastest-growing rollup ecosystems on Ethereum, empowering web3 teams to launch high-performance, customizable, application-specific rollups. Dozens of leading EVM chains, including Manta, Apechain, Kinto, Injective, RARI Chain and Zero Network by Zerion, use our trusted Rollup-as-a-Service platform to enjoy unified connectivity with rollups across all leading frameworks.
