Polygon just lately commissioned a report to check the Layer 2 scaling options and create a framework for comparability. It makes use of the instance of the Ethereum for finding out layer-1 ecosystem challenges and throws gentle on ETH layer-2 scaling options.
Notably, the Ethereum market cap elevated multifold from its earlier excessive of $125 billion to roughly $500 billion in 2021. It was an enormous yr for the Ethereum community with the increase of DeFi initiatives and NFTs on the planet.
Stat-alert
The statistics are additionally suggestive of an enormous surge in exercise on the well-known blockchain. The typical day by day transactions have been round 1.5 million via 2021 exhibiting a 35% improve yr over yr. The day by day lively addresses clocked at 600,000 on the community exhibiting a 40% surge yr over yr.
The Complete Worth Settled confirmed an enormous leap in its year-over-year worth. The whole worth settled was $7.7 trillion which represented a 500% improve. Stablecoin accounted for the most important share inside this, with a share of 54% at $4.2 trillion.
One of many key findings within the report places the Ethereum worth settled towards apex bank card corporations corresponding to Visa and Mastercard. The whole buy quantity on Visa stood at $8.9 trillion (in 2020) whereas Mastercard recorded $4.7 trillion (in 2020). Ethereum, nevertheless, was far away from fintech large PayPal which accounted for $1.3 trillion (in 2021) on reflection.
Ethereum’s TVL reported an awesome yr with the quantity surpassing $150 billion in 2021 and growing ~750% yr over yr. The decentralized exchanges elevated by an element of ten in 2021 on Ethereum.
Standing at $750 billion, they have been nonetheless unable to compete with conventional exchanges corresponding to Coinbase at $1.7 trillion. 2021 was particularly a superb yr for the NFT market with Ethereum on the coronary heart of it.
The rise of NFT marketplaces immensely elevated the exercise on Ethereum. OpenSea alone processed $13 billion price of NFT buying and selling quantity.
What’s the draw back right here?
Whereas these astronomical numbers have led to a widespread exercise quantity on the Ethereum community, they’re additionally the explanations for the headwinds. The dramatically elevated quantity has led to scaling challenges on the community. These challenges are seen with the rise in transaction charges.
The typical payment per transaction on Ethereum elevated from $1.5 in 2020 to as excessive as $21.1 in 2021. The report additional states, “Some customers have stomached these excessive charges and continued to make use of the platform. Others have explored the ‘greener pastures’ of other layer-1 blockchains which have decrease transaction charges however distinct and, oftentimes, inferior safety profiles.”
This can be a significantly worrying pattern for the Ethereum community and it makes the case for Layer-2 options extra smart. The upcoming Merge occasion is trying to tackle these points and the Ethereum group is certainly waiting for that.