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Published: September 7, 2024
Ethereum [ETH] co-founder, Vitalik Buterin, has actually come out to state that he does not intend on buying layer 2 networks. This comes days after he moved $1.3 M worth of STRK, the native token of the Starknet layer 2 procedure.
In a post on X, Buterin kept in mind that he would contribute all profits from layer 2 tokens to charity or to support the more comprehensive Ethereum environment.
He stated,
“I likewise do not plan to invest into L2s or other token jobs in the foreseeable future. My objective with offering tasks cash is to support things that I believe are important, specifically in cases where other parts of the environment may underestimate them.”
His declaration comes amidst a raving dispute on the worth that layer twos give the underlying layer 1 blockchain.
Layer 2 network dispute magnifies
Layer 2 networks have actually tape-recorded much development over the previous year, with the Total Value Locked (TVL) rising by almost 200% per L2Beat information. The exact same development has actually not been seen in layer 1 blockchains.
In its Crypto Monthly Recap for August 2024, possession supervisor VanEck stated layer twos were “cannibalizing” Ethereum earnings.
VanEck kept in mind that at the start of the year, the Ethereum blockchain tape-recorded $6M in incomes. In August, this amount had actually dropped to $1.2 M, as deals were pressed from the Ethereum mainnet.
VanEck mentioned,
“Ethereum’s option to enhance its scalability, pressing deals to L2 blockchains, has actually so far stopped working to drive worth to ETH.”
A comparable view was shared by the CEO of Bitwise Invest, Hunter Horsley. He kept in mind that while layer twos drive worth back to Ethereum by utilizing it as a settlement layer, they can have a net unfavorable effect as they are better to users.
Solana, Ethereum neighborhoods clash
The layer 2 argument has actually likewise triggered a divide in between the Solana and Ethereum neighborhoods.
Significantly, the discourse began after Solana co-founder, Anatoly Yakovenko, mentioned that these networks are “parasitic.”
Source: X
Later, the Head of Communications at Solana Labs, Austin Federa, mentioned that “L2-ish things on Solana” are “Network Extensions” and not layer 2 networks.
Ethereum neighborhood member Ryan Berckmans reacted, stating that the term Network Extensions was simply semantics, as these procedures did the exact same thing as layer twos.
The host of The Rollup podcast, AyyeAndy, stated,
“Basically, network extensions are L2s however L2s are not network extensions. It’s a rectangular shape and a square, one meaning fits the other.”
As the argument raves on,
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