Research Summary
The report discusses the evolution and potential of Layer 2 and Layer 3 solutions in the Ethereum ecosystem. The report highlights how Ethereum’s pivot to a “Rollup-centric roadmap” has led to the growth of Layer 2 solutions, which are now being used more than Ethereum itself. However, Ethereum’s blocks remain full, and the Ethereum Virtual Machine (EVM) continues to be widely used. The report also discusses the concept of Layer 3 solutions, which are highly specialized and optimized for specific use cases. The report concludes by emphasizing the need to shift focus towards developing applications, as the infrastructure build-out is nearly complete.
Actionable Insights
- Layer 2 solutions are growing: Layer 2 solutions are being used more than Ethereum itself, indicating a shift in the ecosystem.
- Layer 3 solutions are emerging: Layer 3 solutions, which are highly specialized and optimized for specific use cases, are beginning to emerge. These solutions offer higher speed, lower costs, and customization for specific use cases.
- Focus on application development: With the infrastructure build-out nearly complete, there is a need to shift focus towards developing applications. This is due to excess block space and insufficient demand.
