The L2BEAT team is working on the TVS and asset frameworks. This thread provides some transparency and will show the latest updates. Any feedback is much appreciated!
Now
We are taking a first step towards more useful asset categories on L2BEAT. Our three categories canonically bridged, natively minted and externally bridged should represent just what they say. They provide transparency about the bridging method that is used to transport the asset. This clarification affects mainly USDC, which, for a long time, has been considered ‘native’ although it is bridged externally via Circle CCTP. From now on we show the canonical/native/external breakdown instead of the associated/eth/stablecoins/other breakdown on our summary table and allow users to exclude assets that are not canonically bridged, from the summary.
Re-categorizing tokens based on their primary bridge method is a pragmatic decision and does not attempt any risk assessment. Even canonically bridged tokens can have custom token contracts on Layer 2 that introduce just as many or more trust assumptions than a given externally bridged asset on the same chain. We commit to improve holistic transparency about asset risks, especially in relation to the Layer 2s these assets are minted on, and you are invited to read on to find out what we are planning.
Future
An integral part of a rollup is its trust-minimized bridge. Truly scaling Ethereum requires inheriting its security and decentralization with the use of smart contracts, and a rollup’s canonical bridge is the best effort to guarantee this inheritance. At L2BEAT, we are making additional trust assumptions transparent and provide a roadmap towards maximum disintermediation with our stages framework. But our stages- and risk frameworks focus on infrastructure and entire rollups, while users are using specific assets and apps.
In practice, the situation even more complicated. A given stage 2 designation really only applies to the canonical bridge and -assets of the rollup. If users use what we used to call ‘native’ USDC on that rollup and get censored by Circle, exit windows and the stage 2 guarantees have little meaning. Even if they primarily use a canonically bridged asset, this asset might inherit stage 2 minimized risk on the rollup and during bridging, but the L1 token could be completely permissioned, which undermines any decentralized layers built on top. And what about natively minted and externally bridged assets? For most projects, they make up the majority of their TVS, implying that the rollup ‘secures’ them too. How much a stage 1 project is ‘securing’ their EOA-mintable RWAs is questionable, and we would like to ask, research and answer such questions.
This requires mapping more ‘layers’ than we may be used to, because an asset found in the wild can have many underlyings, having been wrapped and re-wrapped in DeFi, bridged canonically and externally. Each layer can add new trust assumptions and accumulates all previous ones. We want to show them all to you, but doing this well will take a lot of time and might just be impossible. For now we try to provide clear categories that look at the bridging itself, and point at where to look for the full risk picture until we do it for each token:
- canonically bridged assets: look at our stages- and risk frameworks for the Layer 2
- externally bridged assets: look at L2 risk + external bridge risk
- natively minted assets: look at L2 risks
For all three, the L2 token contract risk as well as all underlying risk coming from L1 token contracts or wrapped assets is not included in the categories, because they are only concerning the bridge that is used.