While Ethereum developers are hard at work developing on-chain scaling solutions, including Sharding, Layer 2 is gaining momentum. According to L2BeatAs of September 6, all of these Layer 2 scaling solutions managed nearly $34 billion.
Despite their popularity, most are not only emerging as a centralized system, but also come with security issues. Recently, OP mainnet had to revert to a fail-safe centralized system after finding flaws in the decentralized version.
Ethereum and its layer 2s are flawed
In light of these weaknesses, Justin Boons, founder and IT director of Cyber Capital, a venture capital firm, is taking a stronger swipe at Ethereum and specifically its layer-2 platforms. In a post on X, the founder argues that layer 2 services like Arbitrum and Base are fundamentally flawed and centralized services.
Boons spoke out about X and highlighted the shortcomings of Ethereum developers. The founder accuses them of not scaling right after launch and how “parasitic” layer 2 solutions are becoming. Despite their advantages, Boons claims that these off-chain solutions create an unhealthy dependency.
Interestingly, the founder went on to say that Ethereum is becoming very reliant on these solutions, even though they do not adhere to the guiding principles that govern the blockchain: decentralization.
Venture capitalists are convinced that Ethereum layer 2s are leveraging the popularity of the mainnet not to advance adoption but to make a profit.
Their decision to sacrifice decentralization (and therefore security) will only serve, over time, to undermine the entire ecosystem. In their opinion, platforms like Base, Arbitrum, and the OP mainnet should not be considered “extensions” of the base layer due to their inherent weaknesses.
Dash will benefit from decentralization from the start
While Boons was critical of Ethereum and its dominant scaling options, the founder backed Dash, one of the first blockchain platforms. Unlike off-chain solutions, Dash, the venture capitalist sayingprioritizing scaling from the start.
Specifically, Boons also praised the blockchain’s decision to select a decentralized governance approach. Their decision, the founder added, will “benefit” them in the days ahead.
Still, while there are challenges with layer 2s, Ethereum developers are working to refine the mainnet. Ethereum 2.0 will offer on-chain scalability without sacrificing security and decentralization in a series of upgrades, from Verge to Splurge.
At the same time, the approval of spot Ethereum ETFs is a huge endorsement of the network. Although the U.S. Securities and Exchange Commission (SEC) has not yet publicly endorsed ETH as a commodity, like Bitcoin, the Commodity Futures Trading Commission (Federal Trade Commission (CFTC)) considers it a commodity.
Although it was one of the first platforms, Dash has fallen into obscurity in recent years. It is outside the top 100 most valuable networks and faces liquidity issues after being delisted from some centralized exchanges like HTX.
Featured image from Canva, chart from TradingView
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