Ethereum, one the leading blockchains of crypto technology, established smart contracts. It helped to consolidate decentralized finance, and prevent third-party interference with cryptocurrency transactions. However, in the past its greatest challenge and setback was related to speed and scalability in execution transactions.
Ethereum continues to make great strides in solving scaling issues as the years and months go by. This resulted in the rollout of layer two of Ethereum’s blockchain.
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With the new year’s kick-off, many individuals have shared their predictions and expectations for the crypto industry in 2022. These individuals are investors, analysts, as well as industry leaders. Surojit Chatterjee (Chairman of Coinbase’s Product Office) is one of the many commentators.
Chatterjee anticipates big advances in Ethereum’s scalability. The CPO shared his prediction via a blog post on Tuesday and expressed 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. Additionally, he mentioned potential traction for other layer-one networks.
The CPO further commented in his post on the creation of new layer-one network based upon social media and gaming. The CPO explained that the advancement from layer-one bridges to layer-two will result in a significant improvement in scalability. Furthermore, he predicted a scenario in which the industry is desperate for speed and use of cross-L1 or L1–L2 bridges.
Cross-Bridges are a great way to increase Ethereum scaling
These bridges allow for the transfer of tokens easily from an L1 network such as Ethereum to an L2 network such as Arbitrum. It also allows for reverse transactions among bridges.
Matter Labs was one of the companies that saw 2021’s great advancements. To achieve this feat, the firm created and implemented its layer-two platform on zkSync rollup.
In general, the 2021 year was one of the most successful years for the layer-2 ecosystem. All major platforms saw a significant increase in their adoption. L2beat is a tracker of layer-two ecosystems and reports a nearly 11,000% increase on the total value for this year. This meant that the total value for 2021 would be $5.5 Billion, up from $50 Million in January 2021.
Chatterjee chose zk–Rollups to be his choice for scaling technology because of their potential benefits for investors and users. Zero-knowledge is scalable because it compiles transaction data in batch. It will allow for efficient processing of transactions on Ethereum’s L1 network.
Coinbase CPO also sees privacy-focused apps emerging. But, he said that the regulators would be more interested in it because of KYC restrictions and Anti-Money Laundering laws (AML).
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Chatterjee also predicts increased regulations in the industry, greater DeFi insurance and institutional participation in DeFi. Some other predictions are increases in Web3 participation by Web2 firms, increased brand involvement in metaverses and the use of non-fungible tokens (NFTs).
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