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Layer 2s are the future of Ethereum

Layer 2s are the future of Ethereum

Layer 2s are being discussed by some. As a result, blockchains are becoming speedier and less expensive than Ethereum. Because of this drive to be more efficient, DeFi’s development is anticipated to accelerate and change in 2022.

According to L2BEAT, this will happen in 2022. As of December 21, the total value of all of the solutions is $5.44 in TVL.

In 2022, non-ETH Layer 1s and Ethereum Layer 2s will compete for users based on speed, user experience, affordability, and functionality.

There are also approaches to improve capital efficiency. Balancer, an automated market maker (AMM), can make money by depositing and receiving payment for unused liquidity in Aave, a lending protocol.

According to Glassnode, the number of active Ethereum addresses reached a new high of 10 million in May. This demonstrates that the smart contract platform is in high demand.

In fact, when petrol prices are high, depositing in DeFi methods can cost more than $100. As a result, Ethereum’s L1 will no longer be useable with more users. These are the areas where blockchains such as Solana, Avalanche, and Terra have established themselves. As of December 21, the total value locked (TVL) for all three projects exceeded $10 billion. Terra is the most valuable corporation in the world, with a market capitalization of $19.91 billion as of December 21.

About Nicolle

She is an Indian Freelance writer. She loves thinking, learning, and writing about all things Web3.

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