Ethereum, the second largest blockchain network by market cap. It remains a prominent place for innovation. cryptocurrency hottest From Decentralized Financial (DeFi) to NFT Tokens
The network’s popularity – and high transaction fees – inspired a group of competitors aiming to undercut Ethereum with lower costs, faster speeds, and higher throughput. This has led to speculations that up-and-coming “ETH killers” or Layer 1 blockchain alternatives such as Solana, Binance Smart Chain and even Cardano could one day overtake the market leaders. And as a result, competitors token prices skyrocketed.
But analysts at Coinbase Institutional Ethereum, which provides cryptocurrency research services to large investors, said Ethereum may have succeeded in blocking those ETH killers.
Ethereum Layer 2, which works in tandem with the main blockchain to speed up transactions at a lower cost. May help prevent competition from other Layer 1 protocols, including upgrades like transitions. proof-of-stake It might also help.
“As ecosystem scalability improves, Users of decentralized applications or dapps may stop looking for faster and cheaper alternatives to Ethereum,” Coinbase Institutional said in a statement.reportlatest
“We think it’s the pinnacle of scalability solutions. [เลเยอร์ 2] When combined with upgrades such as Beacon Chain merge and sharding may limit project progress. [เลเยอร์ 1] current options,” according to the Coinbase Institute.
The Ethereum Blockchain is Going to Be proof-of-stake from proof-of-work mechanism This change is likely to significantly reduce the power and computing power on Ethereum, although this does not guarantee faster transactions and lower gas fees.
Coinbase analysts say the development is likely to limit the opportunities of other Layer 1 projects in the second half of 2022.
Zk-Rollups, which will merge transactions and process them off-chain before sending updated transaction data back to Ethereum, could be the key to the success of Ethereum 2.0, according to the Coinbase Institutional. “This is critical for scaling to billions of users over the long term. by processing tens of thousands of transactions per second.”
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