The debate over the possibility of using Ethereum like the Swiss Army in the crypto space is heating up again as DeFi, gaming and NFT have been gaining popularity recently.

But the prospects are not very good given the current situation. The effects of high fees, long confirmation times and slow updates are worrying private users, technology circles and large investors.

Ethereum developers should focus on L1

Faced with the difficulty of providing a satisfactory user experience, Ethereum developers are increasingly turning to competing blockchains that have used this app migration to increase their reach, access and market capitalization.

Blockchains like Solana, Binance Smart Chain, and Avalanche have seen a significant surge in 2021, establishing themselves as more efficient alternatives to Ethereum, and an upgrade to Proof of Stake is still uncertain.

According to Nicholas Merten, creator of YouTube channel DataDash, the advantage of Ethereum is that the blockchain everyone uses is losing ground over time.

In one topic On Twitter, Merten stated that arguments for Ethereum can go wrong over time. He believes that L2 (scalability solutions built on top of the original blockchain) is impractical in the end and creates little incentive to adopt.

“L1 is much cheaper. The cost reduction potential of Rollup (L2) can only be fully exploited if more users switch from L1 to L2. We need big players in the existing financing area to bridge users and bonus programs for LPs who switch to L2, etc. “

Merten claims that people want to pay $ 0.01 in Solana fees instead of paying $ 0.04 for transactions on Polygon – the cheapest L2 solution on Ethereum.

For the analyst, the Ethereum developers should focus on solutions to make L1 (on-chain transactions) more efficient and cost-effective. As smart contracts get more complex, people pay more fees.

Merten believes Ethereum needs better marketing. In addition to technical developments, a team is needed that is able to hold the community fire.

Three Arrows Capital digs up ETH and chooses Avalanche

Interestingly, this view seems to be spreading among institutional investors.

Within hours of Merten’s tweet, Zhu Su, CEO of Three Arrows Capital, announced that he was leaving Ethereum to focus on investing in the competing blockchain Avalanche. In fact, Sus’s Twitter biography describes him as an investor in “AVAX, Krypto, DeFi and NFT”.

“Yes, I gave up Ethereum even though I supported it in the past. And Ethereum has also abandoned its users, despite having supported them in the past. The Ethereum team just sits around watching the coins get burned and doing pure testing, regardless of the fact that new users are powerless to face the high fees. “

Zhu Su stated that under the current conditions, Ethereum is basically in favor of OG. But in the context of global adoption with new users experimenting with the technology, the high network fee is not a fair day-to-day expense.

Shortly thereafter, the wallet allegedly owned by Three Arrows Capital was transfer 17,859 ETH (valued at more than $ 79.2 million) on the FTX exchange.

And Zhu Su is not alone. Even Antonio Juliano, the founder of dYdX – a DeFi protocol that runs on Ethereum – agrees with him.

“That sounds a lot harder than I wanted to say, but it’s similar. Ethereum hasn’t really done anything in the past few years. I can’t think of a 10x useful improvement that Ethereum has made in the past 4 years. “

Ethereum promises to solve these problems by implementing Ethereum 2.0, a new proof-of-stake blockchain that will have minimal fees and very high scalability. However, this solution takes a long time and big investors can only hope that it will not be too late when it comes out.

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Annie

According to Cryptopotato

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