As blockchain companies compete to become the infrastructure layer for finance, gaming, and enterprise applications, one debate keeps resurfacing: should businesses build on Ethereum or Solana as a layer 2 (L2), or use dedicated chains designed around their own rules?

According to John Nahas, chief business officer at Ava Labs, the answer depends on how much control a business actually needs.

During a recent interview on TheStreet Roundtable, Nahas argued that many L2 networks are marketed as extensions of Ethereum, but are really trying to borrow its credibility while introducing new tradeoffs of their own.

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“There’s been some debate around the effectiveness of L2s, the centralization with sequencers and all that kind of stuff,” Nahas said. “A lot of people want to say they’re an L2 because they think by being aligned with Ethereum they are an extension of Ethereum, but they’re not really.”

Nahas was careful not to dismiss Ethereum itself. He called the Ethereum Virtual Machine (EVM) “fantastic” and said Avalanche “loves Ethereum.”

But in his view, Ethereum was not originally designed for a world where different jurisdictions, compliance rules, and asset classes all need to coexist at scale.

That is where Avalanche distinguishes itself from other blockchains. Rather than stacking more layers on top of a base chain, Avalanche allows businesses to launch sovereign chains with their own validators, rules, and compliance structures.

“Every Layer 1 (L1) is sovereign,” Nahas said. “It has its own rules, its own validators, whatever it needs to do for the jurisdiction, the use case, the compliance, or the application.”

He contrasted that with what he described as Ethereum’s “inverted pyramid,” where multiple layers depend on the chain beneath them. Avalanche, by comparison, is “like a multi-chain highway that all go in the same direction.”

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The bigger question is whether users will ever notice. Nahas said the goal is not to make consumers think about Avalanche while using financial apps, games, or rewards platforms.

At the same time, he acknowledged that visibility still matters. Businesses may want the infrastructure to disappear into the background, but ecosystems still need branding and developer mindshare to keep attracting builders.

This story was originally published by TheStreet on Mar 13, 2026, where it first appeared in the Innovation section. Add TheStreet as a Preferred Source by clicking here.