Ethereum is facing urgent questions as it retunes the activity and fees of user experience SAPS, thus creating uncertainty about whether blockchain will continue to support cryptocurrencies in trade support. Commentators point out that it is increasingly relying on the so-called layer 2 blockchain built on top of Ethereum to improve otherwise clumsy and expensive transactions. Tier 2 operators such as arbitration and optimism have paid off. Tier 2 transactions have risen 430% since March, while Ethereum collects fees fell 87% over the same period, according to Bloomberg data.
Ethereum’s token, the performance of Ethereum emphasizes the muddy prospect. It has risen about 75% over the past year, during which Bitcoin doubled. Recently, Bitcoin also expanded its highest record of President-elect Donald Trump’s embrace of digital assets, while Ether is far from historic peaks.
“The Layer 2 roadmap is shipped without a careful economics check,” said Max Resnick, head of research at the Special Mechanism Group, which is owned by Ethereum developers Share Systems. “This is obviously a problem.”
“World Computer”
Ethereum was founded a decade ago to create “world computers” that make it easier to build blockchain-based applications, thus making turbocharged finance (or Defi-ecosystem) in people’s trade, lending and Borrowing digital assets to-to-to-defi-Ecosystem is easier – using automatic software to the other party.
According to DeFillama, the network will support more than $72 billion in tokens, as well as more than $100 billion in the nearly $190 billion Stablecoin market. However, the stance that has long been considered the primary may be the first time it has been threatened.
Consensys CEO Joseph Lubin said that while blockchain “sed some pricing power” in the short term, it did so to allow “all Tier 2 to build itself, grow and thrive.”
Ether Products received a warm reception in the U.S. exchange-traded fund industry, with net inflows of $242 million, and Bitcoin ETFs contributed to Bitcoin, compiled by Bloomberg. ETF’s $31 billion flood.
Supply continues to grow
Since the “Dencun” upgrade of blockchain in March, the ether supply has transformed into inflation: the number of tokens in circulation is increasing. An earlier upgrade “The Merge” should prevent and lure investors in 2022.
The cost loss on the 2-tier platform exacerbates this situation because the supply of ether is controlled by permanently deleting tokens representing a portion of the transaction fees.
Now, there is a live debate on whether bringing layer 2 into folding is the right way to Ethereum.
“No one understands the roadmap except like a human conspiracy, and they don’t really telegraph the scenery in a simple way,” said Zaheer Ebtikar, co-founder of Crypto Hedge Fund Split Capital.
Supporters had hoped that Tier 2 would net net worth of Ethereum, but the overall benefits of the network were “not as clear as it was in the beginning.”
Ethereum is dying. All major projects have turned to their own blockchain. UNISWAP, POLMARKET and now ENS – they all use EVM technology, but not Ethereum itself. Ethereum is no longer needed. Not scaling L1 is a fatal error. https://t.co/i2nxfqcui1
-Nikita Zhavankov (@nikzh) November 11, 2024
Competitor Network
Ether has neutron syndrome because it performs poorly but is still large enough that only a significant increase in institutional inflows can rise at prices, Split Capital’s Ebtikar said. Ether’s current market value is about $400 billion.
Defilama data shows that capital is flowing to rival networks such as Solana, with Ethereum supporting the most assets locked on Defi applications. Solana’s tokens have risen 300% over the past 12 months.
More affordable networks such as Solana appear to be catching up with Ethereum, said Eliezer Ndinga, vice president of strategy and business development at 21.co.
A key figure with a constant belief is Ethereum co-creator Vitalik Buterin. Butling said in an interview with Bloomberg News that many Tier 2 teams expressed interest in “finding ways to be more collaborative and support the Ethereum ecosystem.” “He added that these auxiliary networks are deeply integrated with Ethereum’s community.
Resnick’s special mechanism team put forward a different tone, believing that Ethereum was in a “dangerous zone” for the first time in its history, as it faces Solana’s real rival. Resnick said Ethereum must focus on scaling “to retain its users and moat in the short term.”
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