🧵 [Coin Ecosystem Basic Concepts #2-4] What to Really Look for When Choosing Layer-2 4️⃣ Quality of Liquidity: TVL is about 'staying power' rather than 'quantity' It’s better if you can look beyond just the size of TVL. You need to check the retention rate (seasonality, churn rate), whether there are real usage transactions, active wallets, and revenue from fees accompanying it. 5️⃣ Safety Checklist (Beginner's version) 1) Security: Is there a recent audit report? Is there a bug bounty program? *Bug bounty: A system that rewards individuals for finding and reporting vulnerabilities in advance. 2) Sequencer: Is it a single entity? Is there a decentralized roadmap/schedule available? 3) DA (Data Availability): Is it stored on L1? vs external DA? In the case of external DA, "additional trust assumptions" are needed, which will be discussed in more detail later. 4) Finality: How long is the withdrawal waiting/challenge period? 5) Governance: Divided into off-chain + executors / on-chain governance methods. * Who decides the rules of the protocol, upgrades, and money? * The risks and checklist of governance also need to be discussed in detail. 6) Economics: It’s necessary to check whether the money earned by the protocol actually returns to token holders. (Think of dividend stocks) * If we delve into the return methods, the content is quite extensive! 6️⃣ Investment/Usage Tips (Practical One-liner) - Frequent trading: Prefer ZK series (advantages of fast confirmation and withdrawal), but also check the fee perception. - Frequently use bridges: Prioritize official bridges + those with time locks/multi-signatures. - Liquidity providers (DeFi): Only projects with high TVL retention rates and accompanying fee revenue. 7️⃣ Conclusion The competition of L2 is not about "who is cheaper and faster," but rather, "who can hold liquidity longer with fewer trust assumptions." For beginners, just looking at bridges, finality, and value recovery is already half the battle.