Gas Fees Will Be High For Coming Months – Use Layer 2 Solutions

One of the main issues that Ethereum is currently facing is the lack of scalability. This has led to increased gas fees that are making DeFi developers migrate to other platforms. Blockchain networks such as Solana and Polygon have become highly popular in recent months for being scalable and offering low gas fees.

Rising Ethereum Gas Fees

The high cost of Ethereum gas fees has always sparked debate in the crypto community. Ethereum, just like Bitcoin, currently works through a proof-of-work mechanism, but the platform is soon making steps towards changing to a proof-of-stake mechanism.

One of the ways that Ethereum seeks to embrace layer two solutions is with the ETH 2.0 upgrade that is expected to happen in 2022. Ethereum’s roadmap towards shifting to a layer two solution has already commenced, as the platform recently launched a token burning feature to raise the values of ether tokens.

Some of the strategies that will be implemented to achieve layer two include sharding, which will ensure that transactions are processed much faster. Once Ethereum 2.0 comes into play, it is expected to solve the scalability issues developers face on this platform.

Besides 2.0, Ethereum has already launched the Optimism project, a scalability solution that DeFi networks can adopt to improve efficiency. Optimism has already received endorsement from major projects on Ethereum. It is also providing a timely solution to lags and high gas fees before ETH 2.0 kicks in.

Despite the efforts being made by Ethereum, layer two is still far from being implemented. DeFi has been booming in recent months, and if more projects are launched on the network, we could see gas fees increase again. Hence, various projects have already started shifting towards layer two solutions before gas fees become too intolerable.

Besides, the crypto market is on a rebound, and we could see an increase in ether prices, which could lower the supply, and further lead to developers incurring more in gas fees.

Layer Two Solutions

For those who want to bring scalability into their projects, layer two platforms offer the ideal solutions. Layer two solutions can be either Ethereum-based or adopt other blockchains that offer a more scalable approach.

Some of the popular layer two solutions available in the crypto market include Plasma and Bitcoin’s Lightning network. Optimism is the recent layer-two solution based on Ethereum, largely being adopted by DeFi projects on Ethereum.

Layer two solutions work by handling transactions outside of the Ethereum mainnet, which helps you avoid congestion. Hence, they are ideal for projects that want to continue running on Ethereum but escape transaction lags and the high gas fees.

While layer two solutions are becoming very popular in the crypto sector because of the boom of DeFi, some projects have completely migrated from Ethereum in search of scalable layer one blockchains.

Solana is one of the most scalable blockchains in the crypto market currently. Some projects such as Power Ledger have migrated from Ethereum and seek a more scalable approach to the Solana network. Solana is believed to process transactions with speeds of over 65000 transactions per second. These speeds are significantly higher than what Ethereum can offer.

Hence, DeFi projects that want to run away from Ethereum now have an option to choose between layer two solutions as they await the deployment of ETH 2.0 or migrate completely to new and more scalable blockchains.

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