• Dapps:16.23K
  • Blockchains:78
  • Active users:66.47M
  • 30d volume:$303.26B
  • 30d transactions:$879.24M
Rising popularity of centralized L2 solutions undermines Ethereum values

Rising popularity of centralized L2 solutions undermines Ethereum values

user avatar

by Giorgi Kostiuk

a year ago

  1. Centralization of L2 solutions
  2. Influence of centralized lobby
  3. Ethereum losing dominance

    4. Centralized second-layer solutions for Ethereum (ETH) pose a threat to the network's core values, according to Justin Bons, founder and CIO of Europe’s oldest crypto fund Cyber Capital.

    Centralization of L2 solutions

    L2 solutions should not be treated as 'extensions' of Ethereum, as they do not inherit its qualities and can both steal and censor users' funds. This statement was made by cryptocurrency expert Justin Bons in his recent X thread.

    Moreover, none of Ethereum's L2 solutions have incentives to decentralize over time, as this step would compromise the income from running sequencer nodes.Justin Bons

    Influence of centralized lobby

    Bons highlights the growing importance of the L2 lobby. The success of Base, a Coinbase-linked Ethereum L2, demonstrates what can be achieved by this manner of scaling. According to L2Beat, Base accounts for 17.52% of all Ethereum L2s' TVL, replacing OP Mainnet as the second largest solution.

    Ethereum losing dominance

    Finally, Ethereum might be losing its dominance in the smart contracts segment as developers move to more democratic L1s. The prominence of L2s within the network shows that Ethereum has already crossed the Rubicon, becoming a platform for profit-oriented companies that have deprived it of the chance to scale L1 in a more decentralized and inclusive way.

    Thus, the growing popularity of centralized second-layer solutions poses a risk to the values of decentralization inherent in the Ethereum network, potentially altering the distribution of power and influence in the cryptocurrency ecosystem.

0

Rewards

chest
chest
chest
chest

More rewards

Discover enhanced rewards on our social media.

chest

Other news

Mission 70 Marks a New Era in Tokenomics for Internet Computer

chest

Mission 70 marks a new era in tokenomics for the Internet Computer, emphasizing execution and sustainability in its economic framework.

user avatarLucas Weissmann

Mission 70 Aims to Boost Demand for ICP Tokens

chest

Mission 70 aims to boost demand for ICP tokens by 26% through expanded AI tooling and enterprise adoption, while also implementing supply-side adjustments.

user avatarFilippo Romano

Mission 70 Enhances Infrastructure for Enterprise and AI

chest

Mission 70 outlines significant infrastructure upgrades designed to support sustained demand rather than speculative spikes.

user avatarEmily Carter

Internet Computer Introduces Mission 70 to Reshape Token Economics

chest

The Internet Computer ICP ecosystem introduces Mission 70, a new economic framework aimed at reducing inflation and enhancing network usage.

user avatarKaterina Papadopoulou

Hyperliquid Donates 10,000 HYPE to Crypto Investigator ZachXBT

chest

ZachXBT receives a generous donation of 10,000 HYPE tokens from the Hyperliquid Foundation, highlighting the community's trust in his work as a crypto investigator.

user avatarTomas Novak

Bernstein Analysts Recommend Buying BYD Stock

chest

Bernstein analysts recommend buying BYD stock, highlighting the undervalued battery business and potential for growth.

user avatarMaya Lundqvist

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.