The primary allure of Layer 3 (L3) blockchains lies in their potential to significantly reduce the overhead required to launch and operate high-performance blockchain networks. While deploying a Layer 2 (L2) chain still involves some fixed operational costs, such as submitting data to Ethereum, L3s offload the bulk of this burden to the underlying L2 network. This makes L3s far more cost-effective to launch and maintain compared to standalone Layer 1 (L1) or L2 chains.

As Russell, an industry expert, explains, "The fixed overhead cost to operate a Layer 3 is significantly less than for a Layer 2. Submitting data commitments to a Layer 2 costs a fraction of doing so on Ethereum mainnet." This lower barrier to entry could catalyze an explosion of innovation as developers deploy specialized, purpose-built blockchains for a wide range of applications, from gaming and decentralized finance (DeFi) to Web3 social platforms.

Major projects are already experimenting with L3 technologies. Leading non-fungible token (NFT) companies like Yuga Labs and Azuki have launched dedicated L3 "Otherchains" to power their metaverse experiences atop Arbitrum. The popular Farcaster social network has spawned niche L3 chains like DegenChain tailored for token economies and Frame Chain optimized for developer mini-apps. DeFi protocol Injective plans to launch an L3 network this year to attract liquidity, lower fees, and reduce the supply of its native INJ token.

These custom chains can leverage L3-enabled features such as alternative data availability layers and custom gas tokens. The ability to use project-specific tokens for gas fees creates tight feedback loops for driving usage and incentive alignment. As Russell notes, "Custom gas tokens enable concrete next steps towards building robust token economies. They can subsidize fees for developers and users while bootstrapping new use cases."

Beyond spawning an abundance of domain-specific blockchains, L3s could hold the key to finally delivering the scalability and usability required for mainstream Web3 adoption. One major barrier has been the cumbersome and costly process of onboarding new users into blockchain-based applications. Today's paradigm often requires novice users to acquire niche L1 or L2 tokens just to get started with a decentralized application (dapp) - an overwhelming experience compared to standard Web2 onboarding.

By building atop lower-cost L2 networks, L3s radically reduce these onboarding hurdles. New users can seamlessly join an L3 ecosystem for just a couple of L2 transaction fees, bypassing the complexity and expense of directly interacting with base layer chains. As Russell explains, "With a Layer 3, onboarding new users will only require two Layer 2 transactions, which is a small fraction of the cost of acquiring Layer 1 tokens and depositing into a Layer 2. It presents a compelling path to bootstrap usage and adoption."

This frictionless experience could help crypto dapps finally compete with the seamless Web2 user journeys provided by Internet incumbents like Facebook, unlocking mainstream adoption. Of course, despite their promise, L3s are still an emerging innovation battling skepticism around potential security tradeoffs and ecosystem fragmentation. But if the scalability and user experience benefits prove out, they could become a core catalyst for Web3's mass embrace.