What Is a “Small-Cap Performant L1”?

By Nate Novosel

If you’ve been following eCash’s X posts over the last several months, you’ve probably seen a new term it’s using to describe the eCash blockchain: small-cap performant L1. So what does that mean exactly? Well, let’s break it down to its three elements:

• Small-cap
• Performant
• L1

Because the word “performant” modifies the term “L1”, we’ll cover L1 second below:

Small-Cap

Small cap refers to a low market capitalization. The market cap is the overall value of the cryptocurrency assuming that all coins were sold at the current market price. Note that inflationary crypto will use the current crypto in circulation, while cryptos with hard maximum limits to the quantity that will ever exist may have the market cap given the amount in circulation or the market cap given all the coins that could ever possibly exist. For example, Bitcoin and eCash (since the latter is a fork of a fork of the former) both have the 2,100,000,000,000,000 sat supply limit (21,000,000 Bitcoin = 2,100,000,000,000,000 sats = 21,000,000,000,000.00 eCash), so you might see a market capitalization with a ~1% difference given the number of BTC/XEC mined vs. total possible. Because the difference is negligible, either works.

At the time of writing, Bitcoin’s market cap is ~$2T, which is obviously a huge value. That would be large cap. Therefore, eCash’s relatively small ~$200m market capitalization is small cap. In stock market terms, companies under $2B will usually be small-cap, $2-10B will be mid-cap, and $10B+ will be large cap (though those numbers vary based on when and who you ask because of inflation and various segmentation models).

L1

L1 stands for “layer 1” and refers to the fact that a blockchain can have multiple layers. The base layer of the blockchain is the core infrastructure that runs the network. In Bitcoin’s case, it has software run on many nodes to create a decentralized network that monitors for transactions announced on it. Approximately every 10 minutes, the mining nodes on the network solve the complex mathematical equation to mine a block that contains the transactions made during that time period and records them for accounting purposes regarding which Bitcoin wallets have what amount of BTC. This system is commonly known as the “Nakamoto Consensus” (after Satoshi Nakamoto, the creator of Bitcoin) or “Proof of Work” (referring to the mining blocks proving that a mining node completed the work required to earn the Bitcoin that it received).

Because eCash is a fork of a fork of Bitcoin, it shares the Nakamoto Consensus in its L1 but has added Avalanche consensus, creating a POW/Avalanche hybrid system where transactions made on the network are rapidly spread across Avalanche staking nodes to finalize the transactions in seconds while still using Proof-of-Work to mine blocks, trigger the block rewards (with eCash, rewards go to mining, staking, and development to incentivize the three major contributors to the network), and keep that ongoing record of transactions over time. The improvements over classic Bitcoin are that you have a ~3-second vs. ~1-hour wait time to be sure that your transaction will not be reversed/undone due to double-spending and that 51% of the miners cannot manipulate the network. The system is also superior to other cryptocurrencies because it doesn’t require “master nodes” (special nodes that have greater weight in processing tansactions), didn’t hoard or give out a bunch of its supply to a small number of individuals, doesn’t participate in any market manipulation tactics like burning supply, and still keeps a record of the transactions (that cannot be manipulated by any one node) for full transparency.

L1 differs from L2 in that a layer-2 solution is built on top of the L1 without touching the L1 software. The most famous L2 is Lightning Network for Bitcoin, which aimed to solve for Bitcoins infamous scalability problem of being limited to 7 transactions per second (which creates huge bottlenecks and transaction price increases during periods when thousands of transactions are being made on the network at one time). Lightning and L2 solutions like it are meant to solve problems with the L1 or add capabilities/functionality that L1 can’t perform. It is a good idea to have some things that you can do on L2 that you can’t do on L1 to ensure L1’s integrity, but putting fundamentals like scalability for an L2 to solve just because there are too many people who don’t want to change the L1 to preserve its original state risks the blockchain not being able to handle the increased demand it’s getting.

Performant

“Performant” refers to its recently developed high speed and capacity: to be exact, eCash is currently operating at ~3-second finality and is targeting ~5m transactions per second with its future improvements. “Performant” modifies the term “L1” because eCash’s abilities to finalize transactions in seconds and handle a high volume of transactions are built into the blockchain itself and don’t require an L2 like lightning network to achieve that performance. eCash solved the blockchain trilemma of Security-Scalability-Decentralization by still allowing almost anyone with a modest-performing computer (at the time of writing, Bitcoin ABC recommended a 2 vCPU, 4GB RAM, 300 GB SSD, 100 Mb/s read/write, and 2TB/month bandwidth minimum server) to run a node but then also preventing 51% attacks that a POW blockchain is susceptible to and scaling the blockchain to support worldwide use. It also has an opt-in privacy feature, CashFusion, which allows for privacy by mixing up transactions so that the blockchain still has a complete record of all coins but prevent someone from knowing who paid what to whom exactly. Ever since eCash’s Avalanche pre-consensus went live on November 15, 2025, eCash has arguably become the most complete blockchain network in existence at solving the trilemma, hence the “performant” moniker.

So, that’s what “small-cap performant L1” refers to when eCash refers to it:

• Small cap: it’s ~$200m market cap
• Performant: ~3-second finality and scaling to a target of ~5m transactions per second
• L1: the core blockchain does it and doesn’t require a layer on top of it to do it

With all of its capabilities built on top of the original Bitcoin network, it is an unrivaled technology and the “small-cap performant L1” tag line might be a pretty big understatement…but that’s what it means.