Ethereum is one of the prominent blockchains in the crypto industry that established smart contract technology. This helped consolidate decentralized finance and checkmate third-party interference in cryptocurrency transactions. But in the past, its main challenge and setback were linked to scalability and speed in executing transactions.
As the months and years roll by, Ethereum is making tremendous progress in tackling scalability issues. This led to the rolling out of the layer-two version of the blockchain.
Related article | Is Norton 360 Mining Ethereum In Your Computer? If It Is, They’ll Take a 15% Cut
With the new year’s kick-off, many individuals have shared their predictions and expectations for the crypto industry in 2022. Some of these individuals include investors, analysts, and industry leaders. Among the several comments comes the latest publish from Surojit Chatterjee, the Chief Product Officer of Coinbase.
Chatterjee predicts major advances for the scalability of Ethereum. Sharing his predictions on Tuesday through a company blog post, the CPO expressed his confidence in Ethereum. He mentioned that the blockchain’s scalability would push it ahead of Web3 and the crypto economy.
Furthermore, he was confident that there would be an improvement in Ethereum’s scalability. Also, he stated possible traction for alternative layer-one networks.
Further in his post, the CPO commented on the emergence of newer layer-one networks based on social media and gaming. He explained that advancing from layer-one to layer-two bridges will propel a vast improvement for scalability. Moreover, he anticipated a situation where the industry has a desperate search for advancement in speed and the utility of cross-L1 and L1-L2 bridges.
Benefits Of Cross-Bridges For Ethereum Scalability
Using these bridges will facilitate the easy transfer of tokens from a layer-one (L1) network like Ethereum to a layer-two (L2) network like Arbitrum. Also, it enables reverse transactions between the bridges.
For companies like Matter Labs, 2021 saw its tremendous advancement. The firm developed and deployed its layer-two platform based on zkSync rollup to achieve its great feat.
Generally, 2021 was a year of massive expansion for the layer-two ecosystem as all the major platforms have a surge in adoption. The tracker for layer-two ecosystems, L2beat, reports almost an 11,000% increase in total value locked for the past year. This brought the value by 2021 to $5.5 billion against $50 million by January 2021.
Concerning scaling technologies, Chatterjee picked out zk-Rollups as he mentioned their attractive capacity for users and investors. He explained that the scalability of Zero-knowledge compiles transactions data in batches. This will enable efficiency in their processing on L1 of Ethereum.
Furthermore, Coinbase CPO foresees the emerging of more privacy-focused applications. However, he mentioned that it would lead to more attention from the regulatory bodies since there are enforced restrictions through KYC and Anti-Money Laundering (AML).
Related article | More Green Energy: Crypto Mining Saves A Hydro Power Plant In Costa Rica
Chatterjee has other predictions, including increased industry regulations, more DeFi insurance, and more institutional involvement in DeFi. Others are shifts to Web3 by Web2 companies, more brand participation in metaverses, and non-fungible tokens (NFTs).
Featured image from Pexels, Charts from TradingView.com