Rivalries among Ethereum layer-2s threaten the ecosystem’s future, says Polygon CEO

Polygon Labs CEO Marc Boiron believes the “biggest problem” facing the second-largest digital asset by market capitalization is the intense competition among Ethereum’s Layer 2 network.

In an April 7 post on social media platform X, Boisron highlighted how competition between these networks continues to cause cannibalization of Ethereum.he explained:

“The biggest problem with Ethereum is that it is continually cannibalizing itself with all L2s competing for developers, users, and liquidity rather than competing outside the Ethereum ecosystem. Microeconomics If you read Science 101, you’ll see that this is the wrong strategy. We don’t have the answers, but we have to deal with it.”

Several members of the cryptocurrency community share Boisron’s views, arguing that Layer 2 networks should target networks outside the Ethereum ecosystem. Karthik Senthil, venture partner at cryptocurrency hedge fund Lattice, said: Said:

“L2 will only succeed if it meaningfully expands the pie and attracts 99% of what is outside of Ethereum today (including web2). You won’t get anything either.”

Notably, Boisron reposted a social media post urging layer 2 networks to play the long game and “win the championship for each other.”post read:

“As fragmentation and chain abstractions are soon resolved, L2s will have to reframe their view of the value of siphoning apps from one L2 to another. is successful, the value of y-L2 increases by a percentage. Stealing an application cannibalizes its value.”

On the other hand, some community members argued that competition between layer 2 could ultimately strengthen the Ethereum ecosystem.

Layer 2 popularity

Layer 2 is a blockchain network designed to enhance Ethereum’s scalability. Over the past few years, it has gained significant popularity and adoption within the cryptocurrency ecosystem.

data L2Beat revealed that the network cumulatively processes 123 transactions per second, outperforming Ethereum’s main chain by a factor of 10.7. For context, Coinbase’s advanced Base network and Arbitrum, the largest Layer 2 blockchain, recorded higher transactions per second than Ethereum’s mainnet in the past day.

Additionally, as of the beginning of this month, the number of active wallets utilizing the network is exceeded 5 million. At the same time, the total amount of assets locked on these platforms exceeds $42 billion, and there are signs that this trend may continue.

The post Ethereum Layer 2 competition threatens the future of the ecosystem, says Polygon CEO first appeared on CryptoSlate.

Related Article

0 Comments

Leave a Comment