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thanks for the well-written primer. Just one observation. You write: >Over time, Ethereum has proven to be sub-optimal for the incredible demand DeFi services
by jules-jules 5y ago
thanks for the well-written primer. Just one observation. You write:
>Over time, Ethereum has proven to be sub-optimal for the incredible demand DeFi services have seen. The network has diseconomies of scale and, given its low throughput capability, gas fees (the cost of executing a transaction on the Ethereum network) have recently been over $150. This makes executing simple low-value transactions, such as swaps on Uniswap, prohibitively expensive! Since the emergence of DeFi, there are several other L1 chains (like Solana and Avalanche) that have become a popular place for DeFi developers to build with transaction fees. Ethereum itself is also in the midst of the infamous “ETH2” transition, which aims to solve this problem on the Ethereum network itself.
This is not correct in the sense that a) 'ETH2.0' is now deprecated term, and b) does not solve the gas fee issue by itself. Ethereum has pivoted to a modular rollup centric roadmap that solves the high costs of transactions already now (cf StarkWare and MatterLabs zkSync) while still keeping the secuirty and decentralisation of the main Ethereum settlement layer. This is in contrast to other L1s such as Solana which have sacrificed decentralisation for higher speed and throughput.
Check out this wonderful resource by @epolynya for the most comprehensive summary of this new roadmap
https://polynya.medium.com/rollups-data-availability-layers-modular-blockchains-introductory-meta-post-5a1e7a60119d https://polynya.medium.com/rollups-data-availability-layers-...
- davepeck 5y agoThanks. This is good detail. I may go back and revise this corner of the post.