Ethereum Layer 2 Network achieveNew target on November 10, with total value locked up (TVL) of $13 billion According to data from blockchain analysis platform L2Beat, industry experts consider This trend of greater interest in Layer 2 will continue. There are some challenges ahead, though. This is especially true in the areas of user experience and security.
According to L2Beat, 32 different networks qualified as Ethereum Layer 2, including Arbitrum One, Optimism, Base, Polygon zkEVM, Metis, and others, prior to June 15, there were locked-up cryptocurrencies. Less than $10 billion is within contracts, and combined TVL has dropped since hitting an April high of $11.8 billion.
But starting June 15, TVL growth in Layer 2 returned to positive. And by October 31, these networks’ combined TVL hit a new high of nearly $12 billion. It has since continued to rise, surpassing the $13 billion TVL mark on November 10 and continuing to nearly $13.5 billion at the time of writing.
“Ethereum’s High Gas Fees During Bull Market causing a huge impact on users And it leads to the need for alternatives,” said Elena Sinelnikova from Metis.
“During the bull market, Ethereum was unable to keep up with its scalability. This means that transactions are slow and very expensive. This costs users hundreds of dollars in transaction fees from a single transaction. So it is not sustainable.”
According to Sinelnikova, another reason Layer 2 networks thrive in bear markets is due to the successful marketing efforts of development teams. This leads to higher user activity.
“They are using capital to attract new users and to attract new businesses to DeFI (decentralized finance),” she said. “People in DeFi from all ecosystems tend to go where the returns are huge. […] And this is just something that happens naturally. And it’s the nature of the business.”
However, Sinelnikova cautioned that Layer 2 still faces challenges when it comes to user experience, such as the Optimistic rollup network still requiring users to wait up to seven days to process withdrawals. This can lead to frustration. And on the other hand, the new zero-knowledge (ZK) proof network can process withdrawals instantly. But it is still in the early stages of development and tends to crash more frequently than older networks.
Kelsey McGuire, Chief Growth Officer for Layer 1 Networks, Shardeum, said Layer 2 faces another serious challenge that is often overlooked: Centralization
“While Layer 2 solutions have gained in popularity due to improvements in scalability in recent years, But at the cost of lost decentralization,” she said.
“The centralized nature of Layer 2 applications poses a key challenge to decentralization and trustlessness. It is the foundation of blockchain.”
McGuire expects that competition from Layer 2 will drive improvements to Layer 1, ultimately leading to higher throughput for Layer 1 itself.
“There will probably be fewer and fewer new L1s, and we will start to see a focus on true scalability (such as high TPS coupled with low gas fees) at L1 rather than relying solely on L2. in providing scalability.”
refer : cointelegraph.com
picture newsbtc.com