Where are Ethereum users flocking to and why?
A Twitter back and forth on swaying loyalties over Ethereum ended up bringing to light some major pitfalls of the network.
Crypto Twitter witnessed a heated debate on why many users are abandoning Ethereum. General dismay over some of the issues with the network could be seen as people vented their frustration over it.
Here are some major takeaways.
It started with a cryptic tweet by @kaiynne, Synthetix founder & an ETH maxi, about some people selling (ETH) out for temporary opportunities of profit. @zhusu was quick to react with an article detailing Kain's rapidly expanding real estate pitted against declining SNX token.
Zhu Su tweeted some of the most evident issues with Ethereum & the team not executing its promised solutions. Many agreed on how the network has not been working towards solving real user experience issues which is an entry barrier for many new users in Ethereum dApps.
DyDX is the biggest perpetual trading platform in DeFi with huge volumes and its founder came in support of Su Zhu's argument on why people are rotating into different projects which are less expensive and solve the scaling problem by introducing new technology.
Ethereum gas fees are exponentially high
Ethereum might have opened the doorway to DeFi by adding new use cases but the fact still remains that there are some inherent problems that are taking longer than usual to be fully addressed. While this is happening, more & more protocols are quickly racing up in solving them.
The cost of sending a transaction on the network has risen sharply. Ethereum costs about 300-400$ sometimes to deposit/withdraw in a LP pool which becomes worse in times of increased demand on the network. New users entering DeFi might get critically dissuaded from using it.
Layer 2 solutions
This issue has been identified by the developer community who are steadily working on layer 2 scaling solutions with prominent leaders in the form of Arbitrum, Optimism, ZkSync & many others. They have scaled Ethereum bringing the cost to a few cents.
Ethereum 2.0 scaling
People are still anticipating the arrival of Ethereum 2.0, a redesigned Ethereum blockchain complete with a new Proof-of-Stake consensus mechanism & the ability to process significantly more transactions per second. Its timelines are not fixed & might take longer than expected.
Layer 1 landscape
binance smart chain, solana, avalanche, NEARProtocol & many more have seemed to pick up on Ethereum's inactivity in scalability & have grown an impressive DeFi ecosystem on their chains with some tradeoffs. However, scalability is still driving the adoption of these chains.
Conclusion
While Ethereum 2.0 is taking its time to be fully actualised, Layer 2 ecosystem other Layer1s are working towards it achieving varying degrees of success. In such a competitive landscape it will be interesting to see what new users coming to DeFi will end up choosing.
Endnote
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