Polygon Labs CEO Marc Boiron believes the extraordinary rivalry between Ethereum’s Layer 2 networks is the “largest downside” dealing with the second-largest digital asset by market capitalization.
In an April 7 put up on social media platform X, Boiron highlighted how the competitors between these networks has led to the fixed cannibalization of Ethereum. He he defined:
“The most important downside with Ethereum is the fixed cannibalization via all of the L2s competing for builders, customers and liquidity as an alternative of competing exterior of the Ethereum ecosystem. Microeconomics 101 would let you know this can be a dangerous technique. I haven’t got a solution, however it must be addressed.”
A number of members of the crypto neighborhood share Boiron’s view, arguing that Layer 2 networks ought to concentrate on these exterior the Ethereum ecosystem. Karthik Senthil, enterprise accomplice at crypto hedge fund Lattice, mentioned:
“L2s will solely turn into profitable after they meaningfully develop the pie and appeal to the 99% of issues (together with web2) which can be exterior of Ethereum at present. If we’re preventing for a similar people who find themselves already right here, no person’s going to win something.”
Notably, Boiron re-posted on social media urging Layer 2 networks to play the long-term recreation and “win one another”. Put up reads:
“As fragmentation and chain abstraction will quickly be resolved, L2s ought to reframe their view of the worth of vacuuming functions from one L2 to a different. Quickly a profitable utility on x-L2 will give a share enhance in worth on y-L2. App theft is cannibalizing that worth.”
In the meantime, some neighborhood members have argued that competitors between Layer 2 might finally enhance the Ethereum ecosystem.
Reputation of Layer-2s
Layer-2s are blockchain networks designed to enhance the scalability of Ethereum. Over the previous few years, they’ve gained important reputation and acceptance inside the crypto ecosystem.
Knowledge from L2Beat reveals that the networks will cumulatively course of 123 transactions per second, outpacing the Ethereum important chain by an element of 10.7. For context, Coinbase’s high-speed mainnet and Arbitrum, the biggest layer 2 blockchain, noticed larger transactions per second than Ethereum’s mainnet within the final day.
Moreover, initially of this month, the variety of lively wallets utilizing the community exceeded 5 million. In the meantime, the whole worth of belongings locked up on these platforms has exceeded $42 billion, and there are indicators that the development might proceed.
The put up Ethereum Layer 2 Rivalry Threatens Ecosystem’s Future, Polygon CEO Says appeared first on fromcrypto.
