I guess it serves the function of an L2/sidechain by taking transactions off-chain, but its like an L3 because the custodian like Coinbase or gemini the first layer, they're just creating another secondary market, pointing to bitcoin, if anything an ETF is like a BRC-20 token, sure theres some Bitcoin on-chain representing it, but theres several 3rd party indexers in between doing the management
I like to think of it as a social layer, to me an uncle jim node is a social layer, you agree with a 3rd party and you have a contract and would need to go the legal route for disputes since don't have ties to the chain in some way to settle the dispute
Good take. My thinking is evolving and your comment aligns.