Layer-3 coins

What Are Layer-3 Coins?

Layer-3 (L3) coins are the native tokens of application-specific blockchains that settle on Layer-2 rollups instead of Ethereum directly.
They give a single dApp (game, DEX, privacy network) its own gas, staking, and fee market while inheriting the sub-$0.01 costs of L2 and the security of L1—nick-named “rollups on rollups”.

Stack in One Sentence

L1 secures, L2 scales, L3 specialises.

Why Build on L3?

1. Ultra-cheap – 1–2 c per tx; batch 1 000 NFT mints for < $1.
2. Custom VM – EVM, WASM, SVM, or privacy zk-VM without bothering the L2.
3. Own tokenomics – issue your coin for gas, rewards, governance; L2 keeps ETH for settlement.
4. Fast inter-op – atomic swaps between L3s on the same L2; no 7-day L1 exit.
5. Regulatory sandbox – KYC the L3 bridge while keeping the public L2 permission-less.

Live Examples You Can Trade

Token	L3 Chain	Parent L2	App Focus	Token Job
XAI	Xai Chain	Arbitrum Orbit	Web3 gaming	Gas, node rewards, season passes.
ORBS	Orbs Network	Polygon / ETH	DeFi middleware	Fee metering, validator staking.
ZKS	Hyperchains	zkSync Era	Any app-chain	Gas & prover auction, restaking collateral.
UNI	Uniswap v4 hooks	Any L2	DEX engine	Fee switch, governance (v4 deployable as L3).
SUSHI	Sushi DEX Orbit	Arbitrum Orbit	Multi-DEX	Staking revenue share, liquidity gauges.

How It Works (One Picture, One Paragraph)

User → L3 sequencer → L3 proof → L2 rollup → L1 Ethereum.
The L3 posts a proof (or calldata) to the L2; the L2 posts to L1. If the L2 re-orgs, the L3 re-orgs with it—so L3 inherits L1 finality via the L2 bridge.

Benefits vs. L2

• 100× cheaper – 1–2 c per transfer vs. 20–50 c on L2.
• Hyper-scalable – mint 1 M game items for <$10.
• Custom privacy – zk-L3s hide internal state, still settle publicly on L2.
• Fast atomic swaps – move tokens between two L3s on the same L2 in seconds.
• Regulatory sandbox – issuer can permission the L3 bridge while L2 stays open.

Risks & Watch-Outs

• Nested trust – if L2 bridge or sequencer fails, L3 is stuck.
• Liquidity fragmentation – each L3 needs its own DEX pools; thin books = 10–20 % slippage on large sells.
• Early tooling – limited block-explorers, indexers, wallet support vs. mature L2s.
• Exit latency – L3→L2→L1 withdrawal can be 7-14 days unless you pay a fast-bridge premium.
• Token dilution – many L3s allocate large genesis stakes to node operators; check emission schedule.

Evaluation Checklist

1. Parent L2 – is it battle-tested (Arbitrum, zkSync, OP)?
2. Data availability – on-chain blobs vs. small DAC; on-chain = safer.
3. Prover economics – who pays for proofs? Is there a fee-burn or restaking loop?
4. Bridge audits – multisig size, upgrade timelock, insured TVL.
5. Traction metrics – daily active wallets, tx count, GitHub commits, developer grants.

Bottom Line

Layer-3 coins give dApps the cheapest gas in crypto and full control over tokenomics while piggy-backing on Ethereum’s security.
If the application gains users, the L3 token can capture significant fee flow; if the app stalls, dilution kills price.
Treat them like early-stage app-chains: verify the L2 parent, audit the bridge, and watch real user growth before aping.

Official / Useful Links

• Arbitrum Orbit Docs
• zkSync Hyperchains
• Xai Whitepaper
• Orbs Network
• Ethereum.org – Layer 3