Cronje's Goerli Move Triggers Confusion and Dreams of Instant Wealth
Yearn Finance’s founder Andre Cronje triggered a dustup on Twitter yesterday when he announced a new Layer 2 scaling solution for multichain.xyz, a cross-chain token transfer tool. Cronje said multichain.xyz would support Goerli, an Ethereum test network. The announcement has left some users wondering whether their tens of thousands of Goerli ETH are about to…
By: Owen Fernau •DeFi News
Yearn Finance’s founder Andre Cronje triggered a dustup on Twitter yesterday when he announced a new Layer 2 scaling solution for multichain.xyz, a cross-chain token transfer tool.
Cronje said multichain.xyz would support Goerli, an Ethereum test network.
The announcement has left some users wondering whether their tens of thousands of Goerli ETH are about to make them rich. The testnet has made its version of ETH available for free from faucets, meaning that if Goerli ETH really gains a monetary premium, holders of the tokens may have proved that there is such a thing as a free lunch.
Developers use Goerli to prototype their applications, making it an important utility in the DeFi space. So the question is whether Cronje’s move will impact the testnet’s usefulness.
Mudit Gupta, a core developer at SushiSwap and creator of a Goerli ETH faucet, seems to think so. He says using the testnet as an L2, “will create a market for GoETH and give it a value. That will make GoETH hard to get for real testing. Thereby, making Goerli unusable for testing.”
That’s probably why many in the DeFi community greeted the news with a lot of head scratching. “Umm, wtf did I just read,” tweeted one ETH user.
It appears Cronje made the announcement somewhat in jest. The founder told The Defiant that he was “simply trying to point out the absurdity of L1s as L2s meme.”
There is some confusion about the definition of an L1 and L2, but L2 generally means a scaling solution which directly inherits L1 security, whereas an L1 has its own security guarantees. The CEO of Starkware, an L2 solution, recently criticized Polygon for blurring the line, saying the project “is a sidechain, not an L2.” Sidechains run parallel to L1s, usually with a bridge between the chains, essentially making them L1s themselves, which appears to be Cronje’s point.
Indeed, on Twitter, El Doggo Diablo pointed out that “there’s no functional difference between a sidechain (even with extra steps) and a test network.”
Regardless, it appears one party may have seen the announcement coming — on Jun. 29 a user called Conspirador Norteño reported new accounts on the social network repeatedly requesting funds from Gupta’s Goerli faucet using identical prose to one another. The spam-like behavior suggests one party controls all the accounts, and was trying to acquire as much of the testnet’s ETH as possible.
If Goerli ETH becomes valuable and one party did indeed control all those Twitter accounts, they would probably make a killing.
For all of the criticism, there is a precedent for Cronje’s Goerle move and a testnet’s native asset cultivating its own value. Polkadot’s Kusuma network, brands itself as an “experimental development environment for teams who want to move fast and innovate on Kusuma, or prepare for deployment on Polkadot.” Kusuma’s KSM token ranks #51 in overall crypto market capitalization at $2.14 at the time of writing.
The asset isn’t listed on CoinGecko, leaving Goerli ETH holders somewhat in the dark as to whether they may indeed be getting something for close to nothing.