Attempts to address the scalability issue of the Ethereum network could take a heavy toll on "Layer 1" solutions. While "Layer 1" solutions may not become trivial immediately after the launch of ETH 2.0, these projects may lose their usefulness.
Layer 1 scaling solutions may lose their relevance and utility with the launch of ETH 2.0, according to Coinbase's latest institutional market report. While there is an increase in the popularity of Layer 1 scaling solutions due to high transaction fees on the Ethereum network, the utility of projects may decrease.
ETH 2.0 addresses Ethereum's scalability and transaction fee issues. Cryptocurrency leaders believe that ETH 2.0 could scale over time, resulting in a surge in adoption of projects hitherto called Ethereum killers. Most of the Layer 1 project development is operated on the Ethereum blockchain.
The Coinbase report reveals 214 projects with over $156 billion TVL. Ethereum Layer 1 alternatives offer users a faster and cheaper option in the absence of ETH 2.0.
The largest altcoin Ethereum is trying to become deflationary with the shell change in the consensus mechanism. In an environment where ETH burning mechanisms are at full throttle, Ethereum is indeed becoming increasingly deflationary. Ethereum price, the leading altcoin, continues to recover after the strong correction recorded in the past few days.
ETH, which fell below $ 3,000 after the leading cryptocurrency Bitcoin slumped below $ 40,000, plunged into the green zone with the subsequent return. The price of the second most popular cryptocurrency is trading at $3,288 at the time of writing.
Ethereum price formed a base above $3,200 for more gains. ETH climbed above the $3,250 resistance level. If the bulls stay active, it could surpass $3,300. The next key hurdle is near $3,350, above which the price could rally to $3,500.