Ethereum Blockchain: 2024 Poised to Usher in Unprecedented Growth and Specialized Chains
Summary:
2024, a pivotal year for the Ethereum blockchain, expects the Ethereum Improvement Proposal 4844 to make layer-2 blockchains significantly cheaper. Likely approval of an Ether spot exchange-traded fund (ETF) in the U.S., Ethereum's first uptick since Merge in 2022, and a predicted burn of Ether supply, could all contribute to a highly successful year. L2 blockchains, like Polygon, are moving towards subdivision into chains dedicated to specific applications, indicating a shift toward a functional, diverse, and integrated blockchain sphere.
Ethereum blockchain could see its most significant year yet in 2024, with potential endorsement of Ether (ETH) spot exchange-traded fund (ETF) in the United States. 2024 will also witness the first upward market cycle post the Merge in 2022 which had an impact on Ether making it deflationary during high network usage periods. Since the Merge, there has been a burn of 0.2% of Ether supply, a figure set to increase with an uptick in network usage.
A critical Ethereum network update, Ethereum Improvement Proposal 4844, is also on the cards for 2024. The update is poised to reduce costs for the entire ecosystem of layer-2 blockchains built on Ethereum by tenfold. As an anticipated turning point in this cycle, it’s expected to spearhead Ethereum and layer 2s into their all-time high year.
On a broader scope, Ethereum is not just an asset like Bitcoin. It is more akin to a shared, programmable database or a decentralized application development platform, and valuable applications need to exist on it to give it value. While there are already some applications on it, more will come from traditional businesses retrofitting their systems to integrate with the blockchain.
Historically, the reason for the absence of major non-native Web3 killer apps on-chain was the lack of capable blockchain thinkers who could see a problem and identify blockchain as the solution or comprehend tokens enough to consider the associated business opportunities. To that effect, blockchain scaling is now focusing on aggregation, a solution that harnesses the benefits of monolithic and modular designs by combining liquidity in safe, near-instant cross-chain transactions using ZK proofs.
Polygon, an example of L2 blockchain, is heading towards building several specialized subchains dedicated to specific uses. How is this realized? Through the Chain Development Kit (CDK), which aids in creating the subchains, and all liquidity is linked via an aggregation layer. Recently, Polygon has announced its focus on Bitcoin rollups (B2), oracle extractable value (OEV Network), gaming (Hypr), tokenized asset issuance for institutions (Libre), and loyalty actions for FlipKart, India's largest e-commerce (FireDrops).
In summary, 2024 is set to be a revolutionary year for Web2's killer apps to finally emerge in Web3. It will also mark a retention cycle's beginning where businesses and users will start to integrate blockchain into their daily activities more and more, making it the year for Ethereum network and L2 blockchains.
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Published At
2/19/2024 5:03:39 PM
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