Why do we say that the era of enterprises building their own L1 blockchains has arrived?

Original text: Barry , Co-CEO of Interchain Labs

Compiled by Yuliya, PANews

Payment giant Stripe has officially partnered with renowned crypto venture capital firm Paradigm to build a Layer 1 blockchain called Tempo. This is a "high-performance, payments-focused blockchain" designed to serve the fintech giant's client base.

Stripe's entry into the market isn't an isolated case; it may signal the beginning of a larger trend: the quiet rise of enterprises building their own L1 blockchains. Why, after years of dormancy in enterprise blockchain, are large enterprises rekindling their interest in building their own blockchains, and are prioritizing L1? The following is the original article, translated by PANews.

This isn’t a one-off case, but the beginning of a larger trend of companies building their own L1 blockchains. Currently, a large number of companies (including some Fortune 500 companies) are considering launching their own L1 blockchains.

Years ago, enterprise blockchains failed, and for a long time, they were a sensitive topic. So, why are established enterprises rebuilding blockchains now? And why are they choosing L1 blockchains?

There are two main reasons for the return of enterprise blockchain:

1. The maturity of stablecoins

The finance teams I'm currently interacting with are no longer unfamiliar or intimidated by stablecoins. Thanks to Circle's IPO and upcoming regulatory changes, stablecoins are now seen as a secure technology with great potential, helping businesses reduce costs, streamline processes, and generate more returns on cash reserves or customer deposits. Most large companies are building the infrastructure to hold and transfer stablecoins. Several countries, including the United States and Japan, are actively promoting stablecoin regulation, and the overall environment is developing in a favorable direction.

2. Focus on payment, not traceability

During the previous wave of enterprise blockchain enthusiasm, most application scenarios focused on provenance (tracing the origin and lifecycle of a cross-company process, such as tracing raw materials in a supply chain or tracking the use of charitable funds). However, such scenarios are technically feasible using databases; the only challenge is trust.

Payments are a primary concern for businesses interacting with these days, regardless of industry. Most current B2B and B2C payment providers and networks charge merchants and businesses high fees, take days to settle, and carry real settlement risks. These issues are exacerbated when cross-border or foreign exchange transactions are involved. For multinational companies, especially platform-based businesses like Airbnb, building their own blockchain-based payment solutions could save billions of dollars and provide a better experience for customers, employees, and gig workers.

As for why we chose to build L1 instead of L2 or smart contracts, there are three reasons:

1. L1 is mature and well-known among technology decision makers

After more than a decade of development, Layer 1 (L1) as a technology platform is well understood and proven. Ethereum, Bitcoin, Solana, Sui, Aptos—pretty much every blockchain non-crypto professionals can name is a Layer 1 (with the possible exception of Base). Cosmos technology alone already powers over 200 chains, spanning a wide range of sectors and carrying over $70 billion in assets. Hyperliquid, the largest new project of the past year, further solidifies this landscape. Furthermore, even the most successful enterprise blockchains, such as Canton, are Layer 1.

By contrast, while L2 is exciting, it's still in its early stages and can be challenging to understand (imagine explaining the difference between "Stage 1" and "Stage 2 Rollup" to the CTO of a consumer goods market business, or explaining how a validation bridge works). Decision-makers at established companies are often reluctant to take risks on emerging platforms. Entering the crypto space itself carries significant risks, so it's crucial to choose the approach that's most accessible to stakeholders.

2. Reduce platform risks

Most companies are reluctant to bet on ETH, SOL, TIA, or other public chains, preferring to bet solely on themselves. Building L1 is the best way to achieve this goal. Large enterprises often use multiple cloud providers to mitigate the risks of AWS or Microsoft, but they believe that the risks of Ethereum or Solana are far higher than those of these traditional partners.

3. Control and Connectivity

The open and transparent L1 provides enterprises with the ability to connect with the broader crypto ecosystem while maintaining platform autonomy. L2 interoperability with other chains, such as Solana, relies on third parties and is often limited by fraud/zero-knowledge proof windows and Ethereum's slow finality, resulting in settlement delays. L1 eliminates this issue, ensuring instant and deterministic settlement and consistent interoperability. This feature, combined with the ability to build a private "walled garden" within which enterprises can implement necessary KYC/AML and application logic, is highly attractive.