Ethereum (ETH) Poised to Become the Native Currency of the Internet, Says Andrew Huang

• The cryptocurrency landscape is abuzz with strategic developments and paradigm shifts.
• Key industry figures share their views on the future direction of blockchain technology and Ethereum’s evolving role.
• Important metrics and statistics reveal the shifting dynamics within the Layer 2 (L2) solutions space.

Explore the emerging trends and significant insights about Ethereum and its L2 landscape, shedding light on future perspectives and current market shifts.

“Native Currency of the Internet”: Andrew Huang on Ethereum’s (ETH) Vision for the Future

Andrew Huang, founder of the Paradigm-supported platform Conduit, emphasizes the importance of Ethereum (ETH) evolving into a public asset that champions decentralization. Such an evolution, he asserts, should allow Ethereum’s Layer 2 (L2) solutions to inherit this decentralization affordably.

Ethereum’s Strategic Path to Maximized Decentralization

Huang advocates for Ethereum to become a fundamental public utility that inherently supports extensive decentralization. According to him, all L2 networks should seamlessly inherit this characteristic without significant costs.

The ultimate aim is for Ethereum to serve as a public asset fostering a thriving ecosystem of L2 solutions that can benefit from decentralization economically. Limiting development through artificial constraints or concentrating efforts solely on maximizing layer 1 fees is counter-intuitive to this goal. — Andrew Huang (@KAndrewHuang) July 1, 2024

He argues that potential barriers to interaction between layer 1 and layer 2, or focusing excessively on fee accrual at the L1 level, could be detrimental to Ethereum’s overarching objectives.

In response to Paradigm CTO Georgios Konstantopoulos, Huang concurs that L2 structures should prioritize robust upgradability and ease of access, dismissing the complexity of “interoperability” as an overstated issue.

In this context, Konstantopoulos suggests that Ethereum’s L1 should primarily serve as a data availability layer for Ethereum Virtual Machine (EVM) networks.

Arbitrum’s (ARB) Market Position Under Pressure: TVL Share Falls Below 40%

Ethereum’s price recently hit $3,462, marking a 2% rise in just 24 hours, with trading volume swelling by 57% to over $10 billion, as per CoinMarketCap.

Declining Total Value Locked (TVL) across Ethereum’s L2 Networks

However, the total value locked (TVL) on Ethereum’s L2 networks is experiencing a significant downturn. From $49.3 billion last month, it has dropped to $42.1 billion, according to data from L2Beat.

Arbitrum (ARB), which was once a dominant force by TVL, now sees its market share plunging below 40%. In contrast, its closest competitor, Base (BASE), has nearly captured 17% of the TVL market.

The OP Mainnet is striving to maintain a TVL above $15 billion, while Blast (BLAST), a newcomer making headlines, currently holds 6.9% of the TVL in Ethereum’s L2 ecosystem.

Conclusion

In summary, the evolving Ethereum and L2 landscape showcases significant directional changes driven by strategic imperatives and market forces. As Ethereum aims to solidify its role as a decentralized public good, L2 networks are pivotal in this transition. The shifting dynamics in TVL across leading L2 solutions underscore the competitive and fluid nature of this space. Readers should stay keenly aware of these developments for future implications in the decentralized finance ecosystem.