• 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

2 years 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

Shiba Inu Exchange Balances Decline Significantly

chest

Shiba Inu balances on Binance have reportedly fallen by 1101 trillion SHIB over the past month, raising concerns and interest among traders.

user avatarMaria Gutierrez

Capital B Secures Shareholder Approval for Aggressive Bitcoin Treasury Strategy

chest

Capital B has received shareholder backing for a significant Bitcoin treasury financing plan, allowing the company to raise capital for future BTC accumulation.

user avatarAndrew Smith

Capital B Aims to Become Major European Bitcoin Treasury Company

chest

Capital B is positioning itself as a European corporate Bitcoin treasury vehicle with a long-term goal of acquiring 1% of Bitcoin's circulating supply by 2033.

user avatarDavid Robinson

Morgan Stanley Proposes Low-Fee Ethereum and Solana ETFs

chest

Morgan Stanley has proposed low-fee Ethereum and Solana ETFs with a 0.14% annual sponsor fee, retaining 95% of staking rewards for investors.

user avatarJacob Williams

AllUnity Expands Europe's Stablecoin Market with SEKAU

chest

AllUnity has launched SEKAU, a Swedish krona-backed stablecoin designed for institutional settlement and digital payments under the EU's MiCA framework.

user avatarZainab Kamara

Safety Tips for Crypto Users Amid Malware Threat

chest

Microsoft provides practical safety tips for cryptocurrency users to avoid falling victim to clipboard malware.

user avatarAyman Ben Youssef

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.