The battle between Ethereum L2 and the public chain

Published on 1 Weeks ago   93 views   0 Comments  

Not long ago, Circle planned to introduce the cash channel of USDC on Arbitrum and Optimism. Developers can use its API. At the same time, it is paralleled with other public chain networks, such as polkadot, cosmos, near, etc. The trend of Layer2 (hereinafter referred to as L2) is more and more like the public chain, but its security is built on Ethereum L1. Many such things have happened, and there will be more in the future.

Image source: Boundless Layout AI Tool generation

At present, various projects are entering the Arbitrum and Optimism ecology, and this migration will be phenomenal in the future. With the gradual maturity of the L2 ecosystem, the TVL (total locked value), active users and real transaction volume of Arbitrum and optimium will surpass most public chains step by step. It is not clear whether it can surpass a few mainstream non Ethereum public chain networks, but there is a high probability that it will surpass in the overall ecological level in terms of the evolution trend.

There will be new public chains in the future, and certain opportunities will also be obtained due to some breakthroughs or differences in narrative or technology. However, if the new public chain can not improve its cost, speed, user experience and other aspects by more than 10 times, it is not easy to surpass L2.

Of course, the future will be a multi chain era. It is impossible for one chain to cover all, and Ethereum cannot take the whole market. As far as the current situation is concerned, Ethereum and the L2 based on it have the maximum probability of becoming the primary network. At the same time, there will be a few relatively large chains and ecosystems, as well as many more niche chains (at present, there are more than 100 L1 blockchains). The niche chains will focus more on certain areas, such as game chains, and even carbon application chains.

In addition, there is also a possible contingency, which is the sudden emergence of a new technology paradigm, starting from a different path, to completely subvert the scalability of the current blockchain. Although the probability of such a situation is not high, it is worth paying attention, because no one can predict the future. In this case, the current public chain networks are not the final form, and the blockchain pattern is far from the end. The real end of the blockchain depends on the real outbreak of web3. (The current web3 is still a very small user group. The real user group is very small. Even though Ethereum has hundreds of millions of addresses, the real user group is not large.)

According to the current trend, L2 will become an important competitor of other public chains. If L2 finally stands out, it will further enhance the network effect of Ethereum ecology (wallet, developer tools, protocols, liquidity, developers, user groups, etc.), so as to consolidate its primary position in the blockchain smart contract field (even web3).

To sum up, just from the current trend, L2 will form a direct competitive relationship with some non Ethereum public chains. Due to L2's advantages in security, it is still possible to significantly reduce costs and improve throughput, and it can take advantage of Ethereum's traditional network ecological advantages (developers, development tools, wallets, protocols, user base, user usage inertia, etc.), L2 will occupy a favorable position in the competition with other public chains, so it has a greater probability of gaining an advantage.

Risk warning: All the above analysis is only a one-sided observation of the market, which is not necessarily correct. The market is constantly changing, which is multifaceted and changeable. Any article in the Blue Fox Notes cannot be used as investment advice. Please keep your own judgment and control risks.


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