ETH Doomed? 😱 L2s Threaten Crypto King!

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Ah, Ethereum! That grand experiment, that digital ledger of such promise, now finds itself at a crossroads. A new report from Binance Research, those diligent number-crunchers, suggests that this push toward layer-2 (L2) blockchain scalability may be, how shall we say, a double-edged sword? A curious phrase, isn’t it? As if progress itself might be a form of self-sabotage. One almost expects a tragic hero to emerge, wringing his hands and lamenting his fate. 🎭

It seems these L2 blockchain networks, intended to ease the burden on the Ethereum mainnet and reduce the cost of transactions, might instead be feasting upon their parent, like a brood of hungry chicks devouring their mother. The very success of these L2s, it is argued, could negatively impact the price of Ether (ETH). A grim prospect indeed! One is reminded of the peasant who starves himself to feed his landlord. 🌾

And as if that weren’t enough, Ethereum’s dominance in the realms of decentralized exchange (DEX) volume and fees is now “under threat” by those upstarts, Solana and BNB Smart Chain, Binance Research warns. Such competition! It’s enough to make one long for the simpler days of bartering chickens for turnips. 🐔

The culprits? Slow and expensive transactions, a fragmented “developer mindshare,” and a reduced flow of value to the L1 due to the rise of these very L2s. A tangled web, indeed! One almost feels sorry for the poor developers, caught in this digital quagmire. 😩

Ethereum’s roadmap includes future upgrades aimed at rectifying these issues, of course. Cheaper transactions, additional security, and more future-proof incentives for the mainnet are promised. But promises, as we all know, are like pie crusts: easily made, easily broken. 🥧

And so, Ether’s value accrual may continue to suffer in the near term, as these upgrades are focused on scalability and data availability, rather than directly addressing the immediate concerns. A bitter pill to swallow, perhaps. One can almost hear the cries of “But what about us?!” from the Ether faithful. 😭

Concerns have been reignited around the Ethereum mainnet’s economic incentives since Ether’s price fell to $1,410 on April 7, marking its lowest level since March 2023. A fall from grace, some might say. Is this the beginning of the end? Or merely a temporary setback? Only time, as that wise old sage, will tell. ⏳

Ether’s price fell over 61% during a four-month downtrend, which started on Dec. 16, 2024, when ETH briefly peaked above $4,100, CryptoMoon Markets Pro data shows. Oh, the fickle nature of fortune! One day a king, the next a pauper. Such is life, is it not? 👑➡️🥺

Ethereum’s Pectra, Fusaka upgrade won’t address Ether’s value accrual

After initial delays, Ethereum’s highly anticipated Pectra upgrade is set to go live on the mainnet on May 7. Will it be a turning point? Or merely a drop in the ocean? The suspense is almost unbearable! 😫

The Pectra upgrade aims to improve Ether staking and L2 network scalability, increase blob capacity to enable more data handling on the mainnet and improve overall network capacity. Ambitious goals, to be sure. But will they be enough to stem the tide? 🤔

The Fusaka upgrade, expected in late 2025, will focus on scaling the Ethereum mainnet as a data availability layer by introducing EIP-7594. Fusaka may also bring an update to the Ethereum Virtual Machine (EVM), resulting in a “more structured approach” to smart-contract creation, reducing runtime overhead and improving developer experience. A brave new world of smart contracts! Or just more complexity for complexity’s sake? 😵‍💫

Ethereum’s commitment to L2 scaling may be a “double-edged sword” due to concerns around the mainnet’s “competitiveness as a data availability layer” and “the sustainability of value accrual to Ethereum the asset,” the report said. The same old song, it seems. Will anyone ever learn? 🤷

“One promising path for stronger ETH value accrual is the development of based rollups,” which “contribute significantly more in fees” to Ethereum compared with L2s like Base, Arbitrum and Optimism, according to a Binance Research spokesperson. A glimmer of hope, perhaps? Or just another false dawn? 🌄

“Another avenue is Ethereum’s evolving role as a data availability layer,” the spokesperson told CryptoMoon, adding:

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2025-04-16 15:21