Experts believe ETH2.0 could be the real killer for Ethereum layer-1 scaling solutions
|- Ethereum’s attempt to resolve the blockchain network’s scalability problem could kill layer-1 scaling solutions.
- Though layer-1 solutions may not become irrelevant immediately after the launch of ETH2.0, these projects may lose their utility.
- Analysts have predicted that the growth of layer-2 scaling solutions combined with upgrades could limit layer-1 projects.
On-chain activity and the utility of Ethereum layer-1 scaling solutions may be negatively impacted by the launch of ETH2.0. The implementation of sharding and proof-of-stake consensus mechanism could make layer-1 scaling solutions irrelevant.
ETH2.0 may be the real killer for layer-1 scaling solutions
Based on Coinbase’s recent institutional market intelligence report, layer-1 scaling solutions could lose their relevance and utility with the launch of ETH2.0.
Though there is a spike in the popularity of layer-1 scaling solutions due to high gas fees on the Ethereum network, there could be a drop in the utility of the projects. The altcoin network is attempting to resolve the scalability problem of Ethereum through sharding and proof-of-stake.
Layer-1 scaling solutions could become irrelevant. Proponents believe that ETH2.0 could scale over time, and until then, Ethereum killers could witness a spike in adoption.
A majority of the layer-1 project development is happening on the Ethereum blockchain. The report reveals a total of 214 projects, with over $156 billion in total value locked. Ethereum layer-1 alternatives offer users a faster and cheaper option in the absence of ETH2.0.
@venturefounder, a crypto analyst and trader, believes that after staying close to 100% supply in profit for months, the correction brought the profitable supply down to 75%. The price is close to the September 2021 correction, $3,000; Ethereum could capitalize further in the ongoing blood bath.
#ETH: After staying close to 100% supply in profit for months, the correct correction finally brought % supply in profit to July 2021 levels (75% supply in profit).
— venturefoundΞr (@venturefounder) January 12, 2022
Even though price is close to Sept 2021 correction (~$3k), $ETH capitulated much harder this time. pic.twitter.com/eylc9pRiwm
#ETH: After staying close to 100% supply in profit for months, the correct correction finally brought % supply in profit to July 2021 levels (75% supply in profit).
— venturefoundΞr (@venturefounder) January 12, 2022
Even though price is close to Sept 2021 correction (~$3k), $ETH capitulated much harder this time. pic.twitter.com/eylc9pRiwm
FXStreet analysts expect Ethereum price to bounce back to $4,000.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.