Bitcoin is still the most popular cryptocurrency project. It's no secret, though, that Ethereum has been rapidly catching up to the original cryptocurrency. Investors have rushed to the blockchain to earn profits on their crypto assets, and Ethereum's decentralized finance (DeFi) use cases have been a significant contribution to this area. Polygon, for example, is a common Layer 2 solution as a result of this.
Sandeep Nailwal, Polygon's co-founder and COO, recently spoke on Cointelegraph to discuss the future of the top smart contracts blockchain. Ethereum is the second most popular layer 1 blockchain, behind only bitcoin. And, according to Nailwal, it's just a matter of time until the blockchain becomes the dominant Layer 1 protocol. He attributes this to a variety of factors, including variations in the two blockchains.
The DeFi Industry is Exploding
In an exclusive conversation with Cointelegraph, the COO explains why Ethereum is poised to dethrone bitcoin as the most popular layer 1 protocol. The expansion of the DeFi space, according to Nailwal, was a key driving force for this acquisition. This is because Ethereum was used for the bulk of decentralized financial transactions, making it the "ultimate settlement layer."
Because of its popularity, ETH has grown even more valuable as a blockchain, putting it in a position to surpass the most valuable cryptocurrency. The COO predicted that “sooner or later, ETH would overtake Bitcoin and become the worldwide standard.” With its scalability solutions, Polygon, according to Nailwal, will play a critical part in the blockchain's long-term success.
In addition to defeating Bitcoin for the top position, the co-founder said that the blockchain may not exist in ten years. This is due to the restricted use cases, and the COO thinks that if bitcoin is to thrive in the future, it must provide more than just a method of trade and investing.
Ethereum is reducing the amount of noise in the market.
With the passage of time, a slew of other initiatives have emerged to compete with Ethereum for the DeFi attention it is receiving. These blockchains, dubbed "ETH killers," have emerged to steal market share from the dominant DeFi network. Solana has been at the vanguard of this competitive trend, and it has expanded significantly in comparison to Ethereum.
Despite the increasing popularity of alternative Layer 1 solutions, Polygon's co-founder does not think that any blockchain can replace Ethereum. Despite the emergence of its rivals, the layer 1 solution has retained a majority share of the market.
For the foreseeable future, Ethereum will most likely remain at the top of the market. With proof of stake coming to the blockchain next year, ETH is poised to dominate both the DeFi and crypto worlds.
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