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Rivalries among Ethereum layer-2s threaten the ecosystem’s future, says Polygon CEO Rivalries among Ethereum layer-2s threaten the ecosystem’s future, says Polygon CEO

Rivalries among Ethereum layer-2s threaten the ecosystem’s future, says Polygon CEO

Ethereum's layer-2 networks face criticism for harming rather than helping themselves.

Rivalries among Ethereum layer-2s threaten the ecosystem’s future, says Polygon CEO

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Polygon Labs CEO Marc Boiron believes that the intense rivalry between Ethereum layer-2 networks is the “biggest problem” facing the second-largest digital asset by market capitalization.

In an April 7 post on social media platform X, Boiron emphasized how the competition between these networks has led to Ethereum cannibalizing itself continuously. He explained:

“Ethereumโ€™s biggest problem is cannibalizing itself continuously via all L2s competing over devs, users and liquidity rather than competing outside of the Ethereum ecosystem. Microeconomics 101 would tell you this is a bad strategy. I donโ€™t have the answer but it needs to be addressed.”

Several crypto community members share Boiron’s perspective, asserting that Layer 2 networks should target those outside the Ethereum ecosystem. Karthik Senthil, the venture partner at crypto hedge fund Lattice, said:

“L2s only become successful if they meaningfully grow the pie and attract the 99% of stuff (web2 included) that’s outside Ethereum today. If we fight over the same people that are already here, no one is winning anything.”

Notably, Boiron reposted a social media post that urged the layer-2 networks to play the long-term game and “champion each other wins.” The post reads:

“As fragmentation and chain abstraction will soon be solved, L2s should reshape their views on the value of siphoning apps from one L2 to the other. Soon a successful application on x-L2 will provide a percentage uplift in value to y-L2 . Stealing applications is a cannibalization of that value.”

Meanwhile, some community members argued that the competition among layer-2s could ultimately enhance Ethereum’s ecosystem.

Layer-2s popularity

Layer-2s are blockchain networks designed to enhance Ethereum’s scalability. Over the past years, they have gained significant popularity and adoption within the crypto ecosystem.

Data from L2Beat reveals that the networks cumulatively process 123 transactions per second, surpassing Ethereum’s mainchain by a factor of 10.7. For context, Coinbase’s high-flying Base network and Arbitrum, the largest layer2 blockchain, recorded higher transactions per second than Ethereum mainnet in the past day.

Additionally, at the beginning of this month, the number of active wallets utilizing the networks surpassed five million. At the same time,ย the total value of assets locked on these platforms has exceeded $42 billion,ย and there are indications that the trend could continue.

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