Joe Lubin, co-founder of Ethereum, discussed the future of smart contract networks at the Digital Asset Summit, saying that the Layer-2 (L2) scaling network remains at the heart of the Ethereum Ecosystem.
In an exclusive interview with Turner Wright of Cointelegraph, Lubin said applications will need next-generation databases with high-throughput blockchain technology. Ethereum co-founders have been added:
“The Ethereum ecosystem is so large and very mature that it will be perfect for a new kind of database (a new kind of layer 2 network).
“One more great application, or Great Layer 2, it’s coming out soon,” continued Lubin.
The co-founders of Ethereum ultimately concluded that the new Layer-1 chain would struggle to compete with the Ethereum Network, which already has a robust architecture and security assurance.
Joe Lubin is talking at the Digital Asset Summit. Source: Digital Asset Summit
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Investors are questioning about the Layer 2 approach
According to L2Beat, there are currently over 140 unique scaling solutions for Ethereum, including 60 rollup networks.
Investors criticize Ethereum’s Layer 2 network as a parasitic component that not only provides minimal economic value to the base layer, but also emits Layer-1 revenue network.
The average gas fee for Ethereum fell 95% after the Dencun upgrade in March 2024. This dramatically reduced transaction fees for the Layer 2 network.
This reduction in transaction fees caused the revenues of Ethereum bases to collapse by 99% by September 2024.
Network fees for Ethereum Layer-1 flatline after Dencun upgrade. Source: Ti terminal
Ether (ETH) prices have generally declined since then, plunging to its recent low of around $1,759 on March 11th, bringing many analysts to predict a further price drop in 2025.
Data from far side investors show that ether exchange trade funds (ETFs) have continued for 11 consecutive days amid the wider economic recession in the crypto market.
The most important day of the spill occurred on March 13th. Investors cited $73.6 million from the ETH ETF as they dumped risk-on assets for volatile alternatives such as cash, government securities and dollar peg stubcoins.
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