- Blast and Base have heightened competitors inside the Ethereum L2 area.
- Polygon CEO sees L2 competitors as dangerous for Ethereum.
Previously, Ethereum’s [ETH] layer (L2s) ecosystem has been dominated by Arbitrum [ARB] and Optimism [OP].
Nevertheless, the entry of Coinbase L2 answer Base and Blast has heightened additional competitors. Proper now, Optimism is quantity 4 when it comes to Whole Worth Locked (TVL).
Blast and Base are within the second and third spots, with $1.67B and $1.45B in TVL, respectively.
L2s have been designed to reinforce Ethereum scalability, however the area is overheated for the time being. In accordance with Marc Boiron, CEO of Polygon [MATIC], the cut-throat competitors in L2 is “Ethereum’s largest downside.”
Boiron stated;
“Ethereum’s largest downside is cannibalizing itself repeatedly through all L2s competing over devs, customers and liquidity somewhat than competing exterior of the Ethereum ecosystem.”
Ethereum fragmentation downside
L2s have been Vitalik Buterin’s roadmap to fixing the Ethereum scaling downside. Nevertheless, the strategy has unintentionally led to liquidity fragmentation walled off from every L2.
Boiron sees the issue as extending to competitors between customers and builders, too. The overheating within the area simply makes it worse.
In accordance with CoinShares, a digital asset supervisor agency, fixing the Ethereum fragmentation downside may enhance consumer expertise, share liquidity, and “bridge-less bridging.”
Some L2s have opted for interoperable roll-up protocols to deal with these points. Polygon has its Aggregation Layer (AggLayer), whereas Arbitrum has Orbit as Optimism leverage its Superchain.
Nevertheless, the CoinShares report notes that regardless of these interoperable protocols, the difficulty nonetheless stays because of completely different technical approaches,
“Interoperability continues to be an issue, primarily fragmentation of liquidity and social coordination.”
Nevertheless, different users are adamant that the aggregation layer may remedy the liquidity fragmentation bit.
