An attempt to solve the Ethereum network’s scalability problem could deal a heavy blow to Layer 1 solutions. Although Layer 1 solutions do not become trivial immediately after the release of ETH 2.0, these projects may lose their benefits. Analysts say that growth in Layer 2 scaling solutions along with upgrades may limit Layer 1 projects.
ETH 2.0 Could Be the Killer of Layer 1 Scaling Solutions
According to Coinbase’s latest enterprise sunday report, Layer 1 scaling solutions may lose their level of interest and utility with the release of ETH 2.0. Although there is an increase in the popularity of Layer 1 scaling solutions due to high transaction fees on the Ethereum network, a decrease in the utility of projects can be observed.
ETH 2.0 addresses Ethereum’s scalability and transaction fee issues. The leading figures of the cryptocurrency market believe that ETH 2.0 will be able to scale over time, and by that time we will be able to witness an increase in the adoption of projects called Ethereum killers. Most of the Layer 1 project developments are being operated on the Ethereum blockchain.
Coinbase reveals 214 projects with TVL worth over $156 billion in its report. Ethereum Layer 1 alternatives offer users a faster and cheaper option in the absence of ETH 2.0.
The Price of Ethereum
Ethereum, the largest altcoin, is trying to become deflationary by changing the shell in the consensus mechanism. In an environment where ETH burning mechanisms are operating at full throttle, ETH is indeed becoming increasingly deflationary. The ETH price is recovering after a strong correction recorded recently.
ETH, which fell below $3,000 after the leading crypto currency Bitcoin sagged below $ 40,000, plunged into the green zone with a subsequent return. Yesilmaz The price of the second most popular crypto currency is trading at the level of 3.288 dollars at the time of writing this article.