Should-one-still-invest-in-polygon-and-other-ETH-layers-2

    In the face of the Ethereum merger, the scaling problems of the blockchain should be solved. Thus, according to some opinions from the Internet, Layer 2 scaling solutions such as Polygon could become obsolete in the future. Whether there is truth to these rumors or scaling solutions don’t miss out on some of the most compelling investment ideas, this article aims to shed more light on it. Read the post now to find out all about the changes since the merge and what’s to come Perspective from Polygon and other scaling solutions not to be missed.

    Reasons for the Ethereum Merge

    Ethereum was the main layer 1 blockchain for smart contracts, dApps, coins and NFTs Merge from proof-of-work to proof-of-work on September 6th completed in the past year.

    This way should the Problems like slow transaction speed, high fees and energy consumption be counteracted. In addition, the user discouraged from using smart contracts.

    Of the The reason for the problems was the high popularity and use. This is because the blockchain fees were driven up enormously by the high utilization as soon as there was high demand.

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    Creation of Layer 2 solutions

    In view of this Layer 2 blockchains like Polygon as a solution developed. They have gained popularity due to their low cost and faster alternative.

    This was achieved by relieving the Ethereum blockchain by Transactions with Polygon are calculated and combined separately and then processed together bundled on ETH will.

    So they could Reduced fees and increased speed while security has been secured by the Ethereum blockchain. Polygon involves several protocolswhich should fix Ethereum’s scaling problems.

    However, the question now arises as to whether there could still be a demand for Polygon if Ethereum were to solve the problems with the merge itself.

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    What the Ethereum Merge brought

    Many have expected Ethereum’s transactions per second to increase. Since the merge, Ethereum has had around 14 to 15 transactions per secondbeing in the top as well reached 23 before became. Instead became only shortens the block time, so that these are created faster. However, only the validators notice this instead of the users.

    But also in relation to the Gas fees have not changed much at Ethereum so far. It was assumed that the higher transaction speed could reduce fees. However, since the Ethereum merge on September 6th, the Transaction costs remained almost constant. For example, they were 15.53 on August 18, just before the changeover, and 14.20 on September 22. However, since June 2022 there has been no real positive change. However, Ethereum has been able to reduce gas fees before.

    In the merge wanted the Ethereum community does not give up decentralization or security in order to scale. Therefore, only around 15 transactions per second should be possible until sharding.

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    Further steps are pending at Ethereum

    In order to increase the speed of Ethereum and reduce transaction costs, the performance of the blockchain must be improved. In order to achieve this, this year the Sharding Technology be introduced. In this context, the Blockchain divided into smaller chains, which are easier to manage. This should Ethereum then also cheaper and faster will.

    Is Ethereum Sharding the end of Polygon?

    Information can be gleaned from ETH’s website that ETH developers are aware of the role of Layer 2 solutions. Because according to estimates Ethereum after sharding to 1,280 TPSwhat however not enough for all the data traffic in the world.

    Should the use of Ethereum continue, demand would also increase again. In this way, the blockchain would again come under the same utilization problems as before. So, among other things, prices would rise again.

    At this point can Polygon will offer further scalability in the future. It’s already coming already at 7,000 transactions per second comes. After implementing sharding on Ethereum, they might even increase exponentially.

    Furthermore, Polygon should also all Connect blockchains using the Ethereum Virtual Machine. Thus, users should be able to take advantage of other blockchains with minimal obstacles.

    Polygon could develop into the leading layer 2 for Ethereum. However, the blockchain also has Competitors, the most significant of which are currently Arbitrum, Optimism and Loopring.

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    Downsides of layer 2 solutions

    Layer 2 solutions leverage the security of the underlying Layer 1 and are therefore ideally just as safe. However, these are experimental projects not yet fully mature are. Nevertheless, they were developed over several years and mostly launched in 2021. However, it should also be noted that they are also partly can be improved in terms of decentralization.

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    About the author: Simon Feldhusen first came into contact with the stock market 16 years ago and has been dealing intensively with trading, cryptoassets, shares, finance and entrepreneurship on a daily basis for more than 7 years. He has also been working as a copywriter and ghostwriter in the financial sector for several years.

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