BlackRock is reportedly interested in launching a native L2 network compatible with Ethereum. The asset management firm has already delved into multiple top cryptocurrencies over the past year, primarily Bitcoin and Ethereum. Now, the firm aims to expand tokenization, setting expectations for launching a native L2 network.
BlackRock has used Ethereum’s chain and has not discussed other potential L1 solutions. However, the company could produce a private L2 chain at any moment, but it would not be natively connected to other assets.
The success of BlackRock’s ETFs this year are very likely catalyst for the firm to create a Layer-2 blockchain network. However, with developing an L2, there will be some hurdles.
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How difficult would it be for BlackRock to launch an L2 Network?
Founded in 1988, BlackRock, Inc. is an US multinational investment management corporation. The corporation is the world’s largest asset manager, with $8.67 trillion in assets under management as of January 2021. (Photo by Erik McGregor/LightRocket via Getty Images)
BlackRock also has ownership in Circle and access to USDC tokens, one of the most widely used stablecoins. Analysts from TokenTerminal believe the asset manager will be ready to launch its chain, possibly a tokenless protocol similar to Base.
However, the biggest problem for BlackRock would be the regulations on using a blockchain. The creation of a L2 chain, compatible with Ethereum, would still require the firm to pay gas fees. Moving between Ethereum and L2 also requires bridges, which are one of the riskiest spots for exploits.
All in all, a firm of BlackRock’s magnitude could certainly launch its own L2, bar some challenges that it can surely handle.
