A mysterious Reddit user predicts based on data that the next major stage of development in the blockchain space will be layer-2 solutions, primarily L2 on Ethereum.
The May 22 post explained that “we are at an inflection point” where the industry is transitioning from bridging between L1 blockchains to L2 blockchains, which “have been more secure and more secure than L1 since its inception.” Centralized and sound money on a trusted neutral platform.”
“L2 adoption is happening now, albeit slowly and suddenly. Behind the scenes, L2 is improving reliability, lowering fees, and increasing accessibility. L2 is still being built and improved, which is fantastic. "
The L2 scaling solution takes advantage of the security of L1 chains such as Ethereum, and eases the traffic on the L1 chain by "rolling up" a large number of transactions for package settlement.
Other L1 chains, such as Solana (SOL), boast relatively cheap and fast transactions, and have gained support from users put off by high fees.
At the time of writing, the average transaction cost for SOL is about $0.0025, while the average transaction cost for ETH is about $1.30. Despite the huge gap, demand for Ethereum block space remains overwhelmingly dominant, with a total value locked (TVL) of $73.89 billion, according to the DeFi Llama blockchain tracker, surpassing Solana's $4.24 billion. Additionally, Solana has been plagued by reliability issues lately.
As of this writing, Arbitrum is the largest L2 on Ethereum with a TVL of $2.65 billion, according to L2beat. The TVL of the entire Ethereum L2 ecosystem is $4.77 billion. These numbers could explode if the right forces conspire to attract users and funds away from other L1s.
Several major decentralized applications (Dapps) have already been deployed on L2. Decentralized exchange (DEX) SushiSwap (SUSHI) and yield aggregator Curve (CRV) are deployed on Arbitrum. Additionally, crypto derivatives protocol Synthetix (SNX) and DEX Uniswap (UNI) are deployed on Optimism.
The upcoming Optimism airdrop could mark the beginning of a rapid influx of users into L2. This is likely due to the same network effects that have attracted users to ethereum and decentralized finance (DeFi) protocols based on the ethereum virtual machine (EVM) over the past two years.
Optimism is an L2 with a TVL of $474 million. EVM chains are chains compatible with Ethereum token standards such as Binance Chain (BNB), Polygon (MATIC) and Fantom (FTM).
Ultimately, if L2 utility increases, Ethereum L1 usage will naturally increase, which could further solidify Ethereum's position as the world's leading smart contract and decentralized application platform.
Cointelegraph Chinese is a blockchain news information platform, and the information provided only represents the author's personal opinion, has nothing to do with the position of the Cointelegraph Chinese platform, and does not constitute any investment and financial advice. Readers are requested to establish correct currency concepts and investment concepts, and earnestly raise risk awareness.
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