A cryptic Redditor has predicted that layer-2 adoption, particularly on Ethereum, will be the next significant phase of blockchain development.
An L2 scaling solution leverages the security of an L1 chain, such as Ethereum (ETH). This is to reduce traffic by rolling up multiple transactions into a single package.
Moving toward layer-2 adoption
According to the Reddit thread, the industry is moving away from bridging between L1 blockchains and L2 blockchains, which are there to employ sound money on a neutral platform and are more secure and decentralized than alt-L1s straight out of the gate.
A mysterious Redditor wrote, “Behind the scenes, L2s improve reliability, decrease fees, and increase accessibility. L2s are still building and improving, and that’s fantastic.”
On L2s, several significant decentralized apps (Dapps) have already been deployed. SushiSwap (SUSHI), a decentralized exchange (DEX), and Curve (CRV), a yield aggregator, are both on Arbitrum. Synthetix (SNX), a crypto derivatives platform, and DEX Uniswap (UNI) are also on Optimism.
Issues with L1
Exorbitant fees have flocked to other L1 chains like Solana (SOL), which offers relatively inexpensive and quick transactions.
At the time of writing, the average SOL transaction costs roughly $0.0025, while ETH transactions cost about $1.30. According to the DeFi Llama blockchain tracker, demand for Ethereum block space has remained massively dominating, with its $73.89 billion total value locked (TVL) outweighing Solana’s $4.24 billion. Furthermore, Solana has recently experienced dependability concerns.
Ultimately, as L2 utility increases, the Ethereum L1 will naturally expand in use, potentially cementing Ethereum as the world’s premier smart contract and decentralized application platform.