• 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

New Report on Market and Onchain Data Released

chest

A report based on publicly available market and onchain data has been published. This report aims to provide insights into current market trends and dynamics.

user avatarLeo van der Veen

Cryip Emphasizes Commitment to Quality Reporting

chest

Cryip has published a report that emphasizes its strict editorial policy focusing on accuracy, relevance, and impartiality.

user avatarLi Weicheng

Beincrypto's Commitment to Editorial Integrity

chest

Beincrypto has released a report highlighting its strict editorial policy that focuses on accuracy, relevance, and impartiality.

user avatarAisha Farooq

Dailycoin Emphasizes Strict Editorial Policy

chest

Dailycoin emphasizes its strict editorial policy prioritizing accuracy and impartiality.

user avatarTenzin Dorje

New Editorial Policy at Decrypt Focuses on Accuracy and Impartiality

chest

Decrypt has introduced a strict editorial policy that emphasizes accuracy, relevance, and impartiality in its reporting.

user avatarBayarjavkhlan Ganbaatar

Coindesk Emphasizes Strict Editorial Policy

chest

Coindesk emphasizes its strict editorial policy prioritizing accuracy and impartiality.

user avatarMohamed Farouk

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.