Founder of Cyber Capital: L2 is the "parasite" of Ethereum

2024-08-29 14:03:00

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ChainCatcher news, Justin Bons, founder and Chief Information Officer of Cyber Capital, stated that the growth of Layer 2 projects is having a detrimental impact on the health of the Ethereum ecosystem. There are several things wrong with the decision to use L2 to scale Ethereum instead of focusing on the main chain. L2 leads to underutilization of the main chain, driving up ETH inflation, as the fees burned cannot curb inflation. The liquidity fragmentation in the L2 ecosystem exists in several unconnected isolated islands.

Justin Bons said, "Scaling Ethereum will destroy all the capital and fees earned by Layer 2 networks because venture capital (VC) cannot take a cut from the scaling of a Layer 1 network. These 'parasites' distort public goods, turning them into a rent-seeking platform for the venture capital chain."

Additionally, Bons criticized the value accumulation in these chains, which are not as decentralized or secure as the underlying Ethereum chain and may contribute to the theft of user funds and censorship of transactions.

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Cybercapital Ethereum L2

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