Now that DeFi, gaming and NFT have enjoyed a surge in popularity, the debate about whether Ethereum could be used as the Swiss Army of crypto-verse is heating again.
However, the current situation isn’t encouraging. Retail users, techies, large investors, and techies are starting to be concerned by the impact of excessive fees, long confirmation periods, slow updates, and slow approvals.
Ethereum Developers Need to Focus on L1
Ethereum developers have begun to look at rival blockchains to improve their user experience and expand their market capitalization.
Avalanche, Binance Smart Chain and Solana have experienced significant growth in 2021. They are now more efficient than Ethereum and the upgrade to Proof of Stake.
Nicholas Merten, the creator of DataDash YouTube channel, says that Ethereum’s advantage as the blockchain used worldwide is gradually losing ground.
Merten explained in a Twitter thread that arguments for Ethereum might not be valid over time. Merten believes that L2s (scalability options built on top the original blockchain) may not be practical and will have little impact on adoption.
4.) L1 should be significantly cheaper
Rollups (L2) have a limited cost-saving potential. This is because more users are moving from L1 to L2.
Major players are needed to sponsor the cost for bridging for existing users, and reward programs to LPs who move into L2, etc.
— Nicholas Merten (@Nicholas_Merten) November 20, 2021
Merten, for example, claims that people would prefer to pay $0.01 in Solana fees rather than $0.04 to transact with Polygon — the cheapest L2 solution on Ethereum.
Merten recommends that Ethereum developers focus on making L1s (on chain transactions) more efficient and cheaper. People will have to pay higher fees as smart contracts become more complicated.
Merten believes Ethereum needs better marketing. A team should not only be skilled in technical development, but also capable of keeping the community excited and engaged.
Three Arrows Capital abandons Bets on Avalanche and ETH (AVAX).
This view is interestingly spreading among institutional investors.
Merten’s tweet was quickly followed by Zhu Su, CEO of Three Arrows Capital and CIO, announcing that he had dropped Ethereum to concentrate on Avalanche, a rival blockchain. His Twitter bio describes him as an “AVAX, crypto and DeFi (and) NFTs” investor.
Zhu Su’s words were not exactly beautiful:
Yes, I have given up on Ethereum despite having supported it in the past.
Yes, Ethereum has abandoned its users, despite having supported them in the past.
It is absurd to imagine sitting around and watching the burn while concocting purity test formulas, when no newcomers have the means to afford the chain.
— Zhu Su
(@zhusu) November 21, 2021
Zhu Su explains how Ethereum is beneficial to OGs under current conditions. However, in a global adoption environment with new users trying out the technology, prohibitive fees for network access should not be an issue to address on a daily basis.
Zhu Su isn’t the only one. Antonio Juliano, the founder of dYdX – a DeFi protocol that runs on Ethereum – agreed to his views (even if his harsh words were painful).
[Risky Tweet of the Day]
Although it is harsher than what I would say, I do agree with some of the points.
Over the last few years, Ethereum has failed to execute. In the last *4 years, I cannot think of any 10x improvement Ethereum has made.
— Antonio | dYdX
(@AntonioMJuliano) November 21, 2021
Ethereum promises to address these issues by implementing Ethereum 2.0, a Proof-of-Stake blockchain with minimal fees and a high degree of scalability.
This solution takes a while, so large investors can only hope it doesn’t take too long to launch.
Marla Brooks – Financial Analysis
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