Ethereum co-founder Vitalik Buterin outlines a strategy to address scalability challenges facing the Ethereum network, focusing on improving layer-1 and layer-2 protocols. He proposes solutions to increase blob space, standardize interoperability, and incentivize layer-2 networks to contribute to Ethereum's growth.
Vitalik Buterin, the co-founder of Ethereum , recently outlined a plan to enhance the scalability of Ethereum 's layer-1 and layer-2 protocols. Buterin's comments come amidst increased criticism directed at the Ethereum Foundation following a decline in Ethereum 's market capitalization. Millions of individuals hold ETH as a savings asset, while many more utilize it for payments.
Ethereum also boasts decentralized finance (DeFi) tools that offer millions of users higher yields compared to traditional markets. To ensure Ethereum's continued growth in both technical and social aspects, Buterin emphasized the need to address challenges encountered by L2 protocols. He identified two primary challenges: limited blob space to accommodate all L2s and use cases, and heterogeneity leading to composability and user experience issues for developers and users.Buterin proposed several solutions to these challenges. For the first challenge, he suggested increasing Ethereum's blob capacity, allowing for moderate short-term scaling while improvements are made to proof-of-stake, storage, EVM, and cryptography. To tackle heterogeneity, Buterin advocated for continued scalability through L2s, ensuring they deliver on their promises. This requires the L1 to accelerate L2 development, while L2s must prioritize security enhancements and the standardization of interoperability. Furthermore, Buterin proposed incentivizing layer-2 networks to contribute a percentage of their revenue to ETH through mechanisms such as fee burning. Other measures include implementing permanent staking or redirecting proceeds to public goods within the Ethereum ecosystem. Despite these initiatives, Ethereum's price performance has lagged. In the same period, it recorded only a 51% gain and currently sits 30% below its 2021 peak. However, the scaling plan has the potential to attract more decentralized applications (dApps) to Ethereum, leading to increased ETH usage. In the long run, this is expected to have a positive impact on Ethereum's price
ETHEREUM VITALIK BUTERIN SCALABILITY LAYER-2 BLOCKCHAIN
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