Ethereum Killers Will Actually Help ETH in Time, Strategist Says
Known as ‘Ethereum killers,’ they are novel second-layer scaling solutions which some believe could put Ethereum at risk in long-run terms. However, strategist Ryan Sean Adams says they are actually not competing with ETH, but aiding it.
Throughout last year’s period, the Ethereum blockchain network has become extremely clogged, mainly because of Decentralized Finance (DeFi). Therefore, users started to expect the appearance of some effective second-layer scaling solutions that could mitigate at least a bit of the pressure off Ethereum.
Second-Layer Solutions and Why Would They Benefit Ethereum
Second-layer scaling solution refers to a network created on top of a main blockchain protocol. Blockchains, mainly because of their structure, have a hard time scaling. Therefore, when the demand to process data on the blockchain increases, it makes the blockchain more expensive to use.
For example, the total daily fees on Ethereum have increased extremely much since the beginning of this year, from approximately 300 ETH to 9,000 ETH. When fees are high, users have a hard time processing data – such as payments – in short time periods, as it becomes an inefficient process.
So, because of the scaling issues in the Ethereum blockchain and other popular blockchains, users began to anticipate some second-layer scaling solutions.
Vitalik Buterin, the co-founder of Ethereum, explains second-layer scaling as: “Squish the transactions together so they don’t take up too much space. Instead of everyone checking everything, have a few people check things, and raise an alarm if they see something wrong. Or use fancy math to check everything at the same time. Before: 15 TPS After: 2500 TPS.”
However, as per Adams, second-layer scaling solutions do not mandatorily compete against Ethereum. Instead, they compete against other scaling developments on top of Ethereum, which could, ultimately, actually help ETH.
“Tether moving its stablecoin settlement to OMG layer 2 is hugely bullish [for] Ethereum. And bearish ETH killers; it means ETH killers aren’t competing with Ethereum. They’re competing with Ethereum’s layer 2s. Competing against something that’s already integrated and secured by Ethereum,” Adams said.
The Ethereum developer community has also been getting ready to launch a second-layer scaling solution on its own.
On June 1st, Buterin said that the development of the scaling solution is basically done: “While everyone wasn’t looking, the initial deployment of Ethereum’s layer 2 scaling strategy has basically succeeded. What’s left is refinement and deployment.”
ETH 2.0 is Almost Here As Well
ETH 2.0, the new upgrade that brings Ethereum closer to the switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus algorithm is also close to launching.
It normally takes more resources and time to process data on a PoW protocol due to the fact that miners check transactions using computing power. On the other hand, on a PoS protocol, network participants use a system called ‘staking’ in order to process data without needing miners.
The fact that numerous current second-layer scaling solutions are showing up on Ethereum, along with the up and coming launch of ETH 2.0 could positively impact Ethereum over time.
Vitaly Dmitriyevich “Vitalik” Buterin is the co-founder of Ethereum, the world’s most popular smart contract platform that enables developers to build decentralized applications (at the time of wirting this, ETH has a market cap pf $2B). Prior to his development of Ethereum, Buterin was the co-founder of Bitcoin Magazine.
Source: Read Full Article