THE L2 VS L1 BATTLE THAT NOBODY IS TALKING ABOUT

Summary from the TLDR Crypto newsletter

L2s hold a structural advantage over L1s in supporting decentralized applications by using centralized block producers to quickly implement fee-sharing and MEV taxes, augmenting app revenue while minimizing costs. L1s are constrained by validator profitability whereas L2s only carry the sequencer's expense with no capital requirements. This competition drives a shift toward profit-driven, long-term crypto apps, aligning with positive regulatory clarity for DeFi and increasing institutional interest.