#L2 Short-Term Competitive Ethereum#

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Hot Topic Overview

Overview

Currently, L2 is in competition with Ethereum L1 in the short term, as many workloads that were originally done on L1, such as NFTs, trading, DeFi, and gaming, have moved to L2, resulting in reduced fees generated on L1. However, in the long term, L2 is considered the only way for the Ethereum ecosystem and ETH assets to compete with a large number of new L1s. L2 is able to maintain Ethereum's decentralized nature while providing fast and cheap transactions, allowing it to compete with other L1s. While L2 may reduce L1's value accumulation in the short term, in the long run, L2 will benefit Ethereum and become its way to defeat numerous emerging L1s.

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Analysis

There is debate about the competitive relationship between L2 and Ethereum L1. Some argue that L2 will compete with Ethereum L1 in the short term, as many workloads that were originally on L1, such as NFTs, trading, DeFi, and gaming, have moved to L2, leading to a decrease in fee generation and burning on L1. However, in the long term, L2 is seen as the only way for the Ethereum ecosystem and ETH assets to compete with a large number of new L1s. Ethereum emphasizes decentralization, and L2 can maintain Ethereum's decentralized nature while providing fast and cheap transactions, allowing it to compete with other L1s. While L2 may reduce value accumulation on L1 in the short term, in the long run, L2 will be beneficial to Ethereum and become the way for Ethereum to defeat many emerging L1s.

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Classic Views

L2 will compete with Ethereum L1 in the short term, as many workloads have moved to L2, resulting in lower L1 fees.

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L2 is the only way for the Ethereum ecosystem and ETH assets to compete with a large number of new L1s, as L2 can provide fast and cheap transactions while maintaining Ethereum's decentralization.

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In the long run, L2 will be beneficial to Ethereum, as L2 will be able to serve so much traffic that the fees generated will exceed those generated before L2 emerged.

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L2 will be the way for Ethereum to beat many emerging L1s.

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