TL;DR
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Earlier than interoperability is solved, gradual transfers between L2’s will pressure the market to make a transparent alternative, leading to one L2 taking the vast majority of the market.
Full Story
For those who’re feeling frazzled after that final half — don’t panic, we’re in good fingers!
Ethereum has the most important quantity of big-brained-developer-types within the area.
Which implies they’re engaged on a repair!
A repair that basically makes the method of transferring your Ethereum between layer-2’s so quick n’ low-cost, that you simply gained’t even discover it!
It’ll all simply occur quietly within the background. The friction can be gone…and also you’ll be blissfully ignorant to how the mechanics of the change works.
(The identical approach you’re with financial institution transfers).
That mentioned: we nonetheless consider the L2 warfare won’t solely occur, however one clear winner will take a lot of the market.
Why/How? It’s all about incentives (brief, medium, and long run).
Within the brief time period, most customers aren’t going to need to switch their ETH between layer-2’s, trigger it’s so rattling gradual n’ clunky (for now).
Within the medium time period, this can incentivize builders to decide on essentially the most lively/well-liked/properly funded layer-2 to construct their merchandise on.
(As to not scare individuals off/make it as straightforward as humanly potential for a considerable amount of customers to undertake their product).
In the long run, regardless of how low-cost n’ quick transfers turn into between two opposing Layer-2’s — the fee to maneuver Ethereum from one particular person’s pockets to a different, will all the time be cheaper/quicker if the switch is being made on the identical chain.
And this creates a snowball impact…
Early on, customers will keep away from transferring between L2’s → which can drive siloed adoption to a spread of L2’s → the L2 with essentially the most adoption will get the vast majority of developer love → by the point these 20+ L2’s turn into totally interoperable (aka pleasant with each other), it’ll be too late…
Trigger certain, the charges and velocity of transferring between any/all L2’s will finally turn into negligible.
However by that point, the market can have selected one dominant chain (alongside just a few runner-ups).
Don’t consider us? The identical factor occurred with e mail.
E-mail is an ‘open protocol’ (aka open algorithm) that anybody/everybody can construct upon, with out prior permission and freed from cost (identical to Ethereum).
But one one e mail platform owns 58% of the worldwide e mail market, whereas the runners up path behind with a % of possession that falls off at a drastic price:
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Apple @ 58.07%
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Gmail @ 29.67%
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Outlook @ 3.42%
Proper now, the highest Ethereum L2 scaling options (by whole worth) appear like this:
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Polygon @ $10.1B
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Arbitrum @ $4.37B
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Immutable @ $3.8B
So how will the L2 wars finish?
With one winner taking most.
Which L2 will that be?
No thought ¯_(ツ)_/¯