Bloomberg’s Lead Commodity Strategist says scaling solutions on Ethereum (ETH) may threaten the rise of alternative Layer 1 cryptocurrencies such as Solana (SOL) and Avalanche (AVAX).
new report As for crypto assets, Mike McGlone said Ethereum’s Layer 2 is being rapidly adopted, trying to stop the flow of new users from Ethereum to another Layer 1 to compete with the top smart contract platforms. I’m here.
“2022 has been a pivotal year for assets, as the adoption of NFTs and Web3 applications on the Layer 2 chain has had a significant impact on the network, even with reduced activity on the Ethereum-based chain. Layer 2 (L2 ) is an umbrella term for blockchain scaling solutions that seek to address the constraints currently facing Ethereum…
Sharding in late 2023 aims to alleviate scalability issues. Meanwhile, L2 stepped in to improve the user experience and stop the flow of users to alternative Layer 1 chains like Solana and Avalanche. “
McGlone points out that activity in layer 2 exceeds activity in the base layer. The analyst, among other things, he says Polygon (MATIC) outperforms other Layer 2 ecosystems and has the stats to prove it.
“After averaging 250,000 daily active addresses over the past few months, L2 erupted in October 2022, overtaking its base chain. It now consistently maintains over 400,000 daily active addresses. Daily active addresses on the rollup or L2 chain grew by 86% in 2022, while Ethereum fell by 33% in 2022. Polygon will be a beacon for developers.
No L2 has brought more network effects to Ethereum than Polygon. Polygon started as a sidechain, but has pivoted to become a technology aggregator focused on zero-knowledge (zk) rollups. A game-changer in blockchain, Zk-proof is a way to prove possession of certain information without revealing the data itself, enhancing privacy and speeding up transactions. “
Commodity strategists also say that some of the corporate partnerships Polygon has attracted, including Coca-Cola, Reddit and Meta, give Polygon an advantage when it comes to hiring and regulatory compliance.
“Aside from the regulatory issues that may arise from a legacy company being involved in issuing its own token, MATIC, see the upcoming Ripple/SEC litigation. is a good sign of potential adoption: companies like CocaCola, Starbucks, Reddit, and Meta are launching NFTs as Web3 introductory products or integrating them into Polygon’s NFT marketplace.”
At the time of writing, MATIC is trading at $1.22.
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