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Polygon Labs CEO Marc Boiron believes the intense rivalry between ethereum's 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 competition between these networks has led to ethereum continually cannibalizing itself. He twitter.com/0xMarcB/status/1777050573763919945″>explained:
“ethereum's biggest problem is continually cannibalizing itself across all the L2s competing for developers, users and liquidity instead of competing outside the ethereum ecosystem. Microeconomics 101 would tell you that this is a bad strategy. “I don’t have the answer, but it needs to be addressed.”
Several members of the crypto community share Boiron's perspective, stating that Layer 2 networks should target those outside the ethereum ecosystem. Karthik Senthil, venture partner at crypto hedge fund Lattice, x.com/karsenthil/status/1777135962369163340″>saying:
“L2s are only successful if they significantly grow the pie and attract 99% of the things (including Web2) that are outside of ethereum today. “If we fight for the same people who are already here, no one will win anything.”
Notably, Boiron republished a social media post urging layer 2 networks to play the long game and “defend each other to win.” The charge twitter.com/3PointAsset/status/1777020459470467519″>read:
“As chain fragmentation and abstraction will soon be resolved, L2s should reshape their views on the value of diverting applications from one L2 to another. Soon, a successful application on x-L2 will provide a percentage increase in the value of y-L2. Stealing applications is a cannibalization of that value.”
Meanwhile, some community members argued that competition between Layer 2s could ultimately improve the ethereum ecosystem.
Layer 2 Popularity
Layer-2 are blockchain networks designed to improve the scalability of ethereum. In recent years, they have gained widespread popularity and adoption within the crypto ecosystem.
Data from L2Beat reveals that the networks cumulatively process 123 transactions per second, outperforming the ethereum main chain by a factor of 10.7. To put it in context, Coinbase's high-flying Base network and Arbitrum, the largest layer 2 blockchain, recorded higher transactions per second than ethereum's mainnet in the last day.
Additionally, earlier this month, the number of active wallets using the networks twitter.com/LeonWaidmann/status/1774697684815036661″>exceeded five million. At the same time, the total value of assets locked on these platforms has exceeded $42 billion and there are signs that the trend could continue.
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