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Ethereum’s creator, Vitalik Buterin sees Layer 2 solutions as the answer to the network’s scaling.
He shared his views during his speech at the 2021 Shanghai International Blockchain Week.
Buterin sees Layer 2 as the only reliable way to boost transactions that will not affect the decentralized nature of operations. As demand for various dapps and NFTs grow significantly, the Ethereum protocol faces scalability difficulties. As Buterin said, there is a need for rapid solutions, while Ethereum's scaling, sharding would require a long time. Layer 2 improves scalability via rollups, which take activities outside the main chain (L1). Data of operations remain on layer 1, which ensures security.
Rollups will also help to reduce the fees of operations.
Ethereum continues to rank first by the number of projects built on top of it and the total value locked in its smart contracts. According to data tracker DeFi Llama, Ethereum’s TVL currently stands at over $164 billion.
The price of Ethereum’s native token reached a new all-time high of $4.366 on October 21. On October 20, Ether’s market cap surpassed $500 bln for the first time ever.