The crypto industry has experienced a noticeable surge in Layer 2 blockchains along with numerous developments built on top of them. Ethereum enthusiast and founder of an Ethereum-centric media channel, Anthony Sassano, recently illuminated the upcoming technical advancements within the Layer 2 ecosystem expected to unfold in the next 6-12 months. Sassano is confident that the Layer 2 advancements will lay a path for a full-blown “layer 2 summer” in the crypto market by next year.
Repercussions of these innovations include reduced rollup fees associated with the implementation of Ethereum Improvement Proposal (EIP) 4844. This proposal, set to go live by the end of this year, will tackle one of the primary pain points for users and developers in Layer 2 solutions, making them more affordable and accessible. Furthermore, the anticipated base mainnet expansion will onboard potentially millions of new participants into the Ethereum ecosystem, creating an increase in adoption and usage of Layer 2 solutions.
Layer 2 solutions will soon benefit from continuous enhancements and refinements to rollups, which will improve overall user experience and developer ecosystems. Sassano also predicts the launch of innovative decentralized finance (DeFi) projects, autonomous worlds, and the tokenization of real-world assets on rollups and Layer 2 and 3 solutions as driving forces behind the anticipated rally.
However, the excitement surrounding Layer 2 is not without skepticism. While several projects, such as Polygon (MATIC), Arbitrum (ARB), and Loopring (LRC), show much promise, the potential risks and challenges tied to the technology cannot be disregarded. Additionally, Sassano’s predicted heated market overall in 2024 relies largely on his intuition, meaning that external factors could affect the outcome.
It remains to be seen whether the current bear market will serve as a foundation for a potential Layer 2 summer in 2024, similar to how the groundwork for the DeFi rally in 2020 was laid during the bear market of 2018 and 2019. The broader crypto community is eagerly anticipating the technical advancements, reduced fees, and launch of new applications, setting the stage for a much-needed bull run, driven by Layer 2 blockchains’ increasing influence.
As advancements in Layer 2 technology and the crypto market unfold, it is crucial to consider the opportunities and challenges that arise within the space. While a promising future looms, several factors still remain uncertain. Enthusiasts and skeptical viewers alike will be scrutinizing these developments closely as the crypto landscape continues to evolve.