Greg Sanders examines how increasing complexity in L2 designs directly impacts the minimum viable balance needed for true self-custody. He analyzes various Layer 2 approaches including Lightning Network, ARKs, and rollups, calculating the actual costs of exiting these systems to the base chain. The presentation poses critical questions about what “self-custody” really means when exit costs exceed balance values, and the regulatory risks that arise when L2 operators effectively become custodians.
This presentation was recorded live at 2025’s OPNEXT, the Bitcoin scaling conference. For more info, visit opnext.dev. OPNEXT livestream and VODs are made possible by Taproot Wizards.
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# Notes:
– Basic L1 exit costs 154 vBytes or ~$0.37
– Lightning exit needs 711 vBytes or ~$1.71
– Each Lightning HTLC adds 319 vBytes or ~$0.76
– ARK tree exits cost up to $50 at 15 sats/vByte
– BVM/federated systems require 10 BTC minimum
– Increasing fee rates dramatically impact viability
