With a market capitalization of $477 billion, Ethereum is one of the largest blockchains in the cryptocurrency industry. Smart contracts, for example, are high on the list of blockchain achievements. This technology has helped consolidate decentralized finance and defeat third-party interference in cryptocurrency transactions. If in the past Ethereum’s challenges were related to scalability and transaction execution speed, in 2022 they are of a completely different order. However, Coinbase’s product manager remains very optimistic.
New year, new perspectives
Earlier this year, various people shared their predictions and expectations for the cryptocurrency industry in 2022. These people include analysts, investors, and industry leaders. Surojit Chatterjee, product manager at Coinbase, also participated in this exercise.
Chatterjee predicts that Ethereum’s scalability will see major advances. It was in a blog post from his company that the CPO expressed his confidence in this blockchain. He also mentioned that the latter would evolve to the point of overtaking Web3 and the crypto economy.
With evident optimism, the CPO spoke about the appearance of new Tier 1 networks based on social networks and games. According to him, when bridges move from Layer 1 to Layer 2, a huge improvement in scalability will follow. He also discussed his fears: At some point, the industry will be desperate to improve the speed and usefulness of L1 and L1-L2 cross-bridges.
The Benefits of Cross-Bridges for Ethereum Scalability
Cross-bridges will play a decisive role in the evolution of the Ethereum blockchain. Its use will greatly facilitate the transfer of tokens from a level 1 (L1) network such as Ethereum to a level 2 (L2) network such as Arbitrum. It will also allow reverse transactions between the bridges.
In 2021, the layer two ecosystem has been massively adopted across all major platforms. Layer 2 ecosystem tracker L2beat in particular reports a nearly 11,000% increase in total value locked over the past year. It has gone from 50 million in January 2021 to 5.5 billion dollars in 2021.
Ethereum will obviously take advantage of this revival to optimize its performance and improve transactions with other networks. This is a challenge that blockchain can face.
The Coinbase CPO believes that several privacy-focused applications will be born in the future, probably in 2022, thanks to Ethereum. Is this a good thing? Partly not, as regulators could impose more restrictions through KYC and anti-money laundering (AML). We’ll see what this year holds for us!
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Luc Jose Adjinacou
Far from dampening my enthusiasm, a failed investment in 2017 in some cryptocurrencies only increased my enthusiasm. Therefore, I resolved to study and understand the blockchain and its many uses and transmit information related to this ecosystem with my pen.
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