Ethereum

2024

Galaxy

Polygon

Flipsides say the ongoing demand for economical alternatives to Ethereum, will drive more layer-2 projects to prioritize reducing end-user costs this year. 
Ethereum is set to confront heightened competition in the blockchain space in 2024, driven by the persistent demand for cost-effective alternatives and the proliferation of Ethereum Virtual Machine (EVM)-compatible <a href="https://crypto.news/tag/layer-2/" target="_blank" rel="noreferrer noopener">layer-2</a> networks, Flipside, a blockchain data platform, said in a recent research <a href="https://mkt.flipsidecrypto.com/download-the-onchain-crypto-user-report" target="_blank" rel="noopener">report</a>. 
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper"> 
 <blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 Is the bull is really here? How can we tell? Data. Sentiment isn't the only thing that's changed lately. According to the data, user behavior is shifting —&nbsp;and with it, crypto markets. We cover it all in The Onchain Crypto User Report 🧵📊👇 <a href="https://t.co/IsclNOZhJk" target="_blank">pic.twitter.com/IsclNOZhJk</a>— Flipside 📊 (@flipsidecrypto) <a href="https://twitter.com/flipsidecrypto/status/1750549189128499204?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">January 25, 2024</a>
 </blockquote>
 <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
 </div>
</figure> 
As per analysts, a substantial portion of EVM users are now actively exploring alternative options to Ethereum due to the allure of lower fees and faster transactions offered by emerging layer-2 solutions. The significance of this shift is underscored by historical patterns, where past bull runs fueled by Ethereum-based protocols resulted in soaring transaction costs. 
<blockquote class="wp-block-quote"> 
 “The continued need for cost-effective alternatives to Ethereum, plus the growing number of EVM-compatible layer-2s, will pressure more layer-2 projects to focus on lowering end user costs.” 
 Flipside 
</blockquote> 
 You might also like: <a href="https://crypto.news/sec-delays-grayscale-spot-ethereum-etf-to-may/"> SEC delays Grayscale spot Ethereum ETF to May </a> 
The competitive landscape is further shaped by a growing number of EVM-compatible layer-2 networks, compelling layer-2 projects to pivot towards prioritizing cost reduction for end users. As part of this evolution, governance tokens of layer-2 networks such as <a href="https://crypto.news/tag/optimism/">Optimism</a> (OP), <a href="https://crypto.news/tag/arbitrum/" target="_blank" rel="noreferrer noopener">Arbitrum</a> (ARB), and <a href="https://crypto.news/tag/polygon/" target="_blank" rel="noreferrer noopener">Polygon</a> (POL) are gaining renewed attention. 
<blockquote class="wp-block-quote"> 
 “The ability of these governance tokens to impact each network’s competitive advantage will play a central role in the layer-2 narrative.” 
 Flipside 
</blockquote> 
Adding to the dynamics, Ethereum’s planned Dencun upgrade, featuring a new feature known as “blobs” that will allow storing large pieces of data on Ethereum blocks through EIP-4844, is anticipated to amplify the competition. Flipside says blobs will enhance block space on the mainnet and boost throughput for layer-2 networks, further challenging Ethereum’s dominant position. 
Analysts at Mike Novogratz’s crypto bank, Galaxy Digital, <a href="https://crypto.news/galaxy-predicts-unprecedented-challenges-for-ethereum-in-2024/" target="_blank" rel="noreferrer noopener">echo a parallel sentiment</a>, foreseeing a pivotal 2024 for Ethereum amid increasing stakes raised by other layer-1 blockchains. 
Galaxy Digital highlights Ethereum’s modular architecture, specifically diverse rollup types, as a source of potential challenges and technological risks due to their early developmental stage. Singling out Solana as the primary contender with its distinctive monolithic architecture, Galaxy Digital positions it as the main competitor against Ethereum this year. 
 Read more: <a href="https://crypto.news/crypto-usage-grew-34-in-2023-bitcoin-ethereum-major-catalysts/"> Crypto usage grew 34% in 2023; Bitcoin, Ethereum major catalysts </a>

Flipside sees rising EVM adoption in 2024 for cost-effective Ethereum alternatives

crypto.news

Other articles published on Jan 26, 2024

AI-Based Crypto Trading Bots Market Set for Remarkable Growth of $145.27 Million

$BONK & $SHIB Sink Lower as Investors Buy Up This Presale Memecoin

Defying Regulations: The Resilience of Crypto Trading in China

Gem Fighter NFTs: Unleashing a New Era in Play-to-Earn Gaming

Bitcoin Mining Rig Maker Canaan Secures $50 Million In Preferred Shares Sale

One billion dollars in ETH Transferred: Thunderclap in the crypto market

Join our free newsletter for daily crypto updates!