With most smart contracts no longer deployed on ethereum, analysts expect the Dencun upgrade to further drive this trend as layer 2 solutions improve.
ethereum is rapidly losing its status as the leading hub for deploying smart contracts amid growing competition among layer 2 (l2) networks, Flipside analysts revealed in a recent research report. According to your dataNearly 640 million smart contracts have been deployed since January 2022, with Polygon and BNB Chain (formerly Binance Smart Chain) leading contract deployment.
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Additionally, Flipside says that Optimism, a Layer 2 solution operating on the ethereum architecture, has accounted for “two-thirds of total EVM smart contract deployments so far in 2024.”
“Given that most EVM contracts are no longer directly implemented on ethereum, we expect the upcoming Dencun update to further accelerate this trend as L2 solutions become more accessible and efficient.”
Another face
Analysts noted that contract implementers have also increased, representing 34.7% of categorizable implementers across all chains observed since January 1, marking a significant increase of 11.2% in both 2022 and 2023. However, Flipside noted that “it's not just developers who can implement contracts,” adding that smart contracts can also implement contracts.
“For example, 'factories' like UniswapV2Factory allow anyone to create liquidity pools for their tokens without permission. This tends to lead to implementations consolidating around implementers like these.”
Another face
Meanwhile, non-fungible token (nft)-related implementers saw a decline from 18.6% to 8.2% over the same period, analysts said, suggesting the next bull run “could prioritize decentralized finance over NFTs, which dominated the previous cycle.” .”
In January, Michael Novogratz's Galaxy Digital crypto bank said in a research report that 2024 will be a crucial year for ethereum as other Layer 1 blockchains, such as Solana, will likely raise the stakes.
Galaxy Digital analysts note that ethereum's modular architecture, particularly the various cumulative types, will introduce new technological challenges and risks due to its early stage of development. By highlighting Solana as the most distinctive general-purpose blockchain that adopts a monolithic architecture, they position it as the main competitor to ethereum.