Sonic

DeFi

Security

<ul class="wp-block-list">
 <li>Cronje reveals $14M in appchain infrastructure costs, arguing it distracts developers from innovation.</li>  
 <li>Appchains face liquidity fragmentation, pushing funds through centralized bridges, increasing security risks.</li>  
 <li>Lack of foundational support limits appchain developers, hindering network effects and broader adoption.</li> 
</ul>  
<p>Andre Cronje, the co-founder of <a href="https://www.soniclabs.com/" target="_blank" rel="noopener noreferrer nofollow">Sonic Labs</a> recently raised concerns about the practicality of layer-2 (L2) appchains. Cronje shared insights from his team’s experience, revealing the financial strain caused by appchain infrastructure costs.&nbsp;</p>  
<p>He noted that their infrastructure expenses had reached $14 million this year, a staggering figure that he believes detracts from the core focus of developers. This financial burden, Cronje argued, forces developers to prioritize cost management over innovation, stunting the growth of decentralized applications in the process.</p>  
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
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  https://twitter.com/AndreCronjeTech/status/1845260816289091980
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<h2 class="wp-block-heading" id="h-liquidity-fragmentation-and-security-risks"><strong>Liquidity Fragmentation and Security Risks</strong></h2>  
<p>Beyond the issue of costs, Cronje <a href="https://cryptonewsland.com/andre-cronje-slams-layer-2-appchains/" target="_blank" rel="noopener noreferrer nofollow">criticized</a> the way liquidity is managed in appchains. He explained that liquidity often flows through centralized bridges, making it susceptible to attacks.&nbsp;</p>  
<p>The challenge of managing scattered liquidity, along with security risks, hinders the wider integration of appchains in the DeFi ecosystem. Cronje suggests that developers face obstacles that hinder the efficient deployment of dApps due to operational and security challenges.</p>  
<h2 class="wp-block-heading" id="h-lack-of-foundational-support-for-appchain-developers"><strong>Lack of Foundational Support for Appchain Developers</strong></h2>  
<p>Cronje also highlighted the lack of foundational support for developers working on appchains. He pointed out that key services, such as stablecoin deployment, oracles, and institutional custody, are challenging to implement without substantial infrastructure investment.&nbsp;</p>  
<p>This lack of support limits the ability of developers to create robust applications. This weakens further the appeal of appchains. Cronje noted that these issues lead to isolated developer communities, which, in turn, hinders the network effects needed to drive widespread adoption.</p>  
<h2 class="wp-block-heading" id="h-industry-response-and-proposed-solutions"><strong>Industry Response and Proposed Solutions</strong></h2>  
<p>Marc Boiron, CEO of Polygon Labs, responded to Cronje’s critique by proposing AggLayer, an interoperable network of appchains designed to address the liquidity fragmentation problem.&nbsp;</p>  
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
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  https://twitter.com/0xMarcB/status/1845299236914479472
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<p>Boiron suggested that this model could <a href="https://cryptonewsland.com/iotex-and-polygon-labs-partner-to-integrate-agglayer-with-iotex-2-0/" target="_blank" rel="noopener noreferrer nofollow">provide a solution</a> to the inefficiencies Cronje raised. Other developers in the DeFi space also contributed to the conversation, acknowledging the need for better solutions, including improvements in cross-chain fund movements through zero-knowledge proofs.</p> 
<p>The post <a href="https://cryptonewsland.com/defi-expert-andre-cronje-warns-against-appchains/" rel="noopener noreferrer nofollow">DeFi Expert Andre Cronje Warns Against Appchains, Citing Developer and Liquidity Struggles</a> appeared first on <a href="https://cryptonewsland.com" rel="noopener noreferrer nofollow">Crypto News Land</a>.</p>

DeFi Expert Andre Cronje Warns Against Appchains, Citing Developer and Liquidity Struggles

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