Crypto News: The crypto industry has been witnessing a significant surge in Layer 2 blockchains, along with a flurry of developments built on top of them. Anthony Sassano, a well-known Ethereum advocate and founder of an Ethereum-focused media channel, has recently shed light on the upcoming technical advancements within the Layer 2 ecosystem over the next 6-12 months. Sassano believes that these advancements will pave the way for a full-blown “layer 2 summer” in the crypto market sometime next year.
Driving Factors Behind the Layer 2 Rally
According to him, the following developments could potentially heat up the layer 2 cryptocurrencies for a major rally:
- Ethereum Improvement Proposal (EIP) 4844: Sassano highlighted that the implementation of EIP-4844 is expected to significantly reduce rollup fees. This proposal, set to go live by the end of this year, will address one of the major pain points for users and developers in Layer 2 solutions, making them more accessible and affordable.
- Base Mainnet Expansion: With the base mainnet going live, the Ethereum ecosystem is poised to onboard potentially millions of new participants. This expansion will bring increased adoption and usage of Layer 2 solutions, as more users engage with Ethereum-based applications.
- General Improvements to Rollups: Continuous enhancements and refinements to rollups will improve the overall user experience and developer ecosystem. These advancements will streamline interactions with Layer 2 solutions, further enhancing their appeal and functionality.
- Launch of Novel Apps on Layer 2: Sassano predicts that the launch of innovative decentralized finance (DeFi) projects, autonomous worlds, and the tokenization of real-world assets on rollups, Layer 2, and Layer 3 solutions will be a driving force behind the anticipated rally. These applications will unlock new possibilities and use cases, attracting more users to the Layer 2 ecosystem.
- General Market Momentum: In addition to the specific developments in the Layer 2 space, Sassano also anticipates a potentially heated market overall in 2024. While this prediction is based on his own intuition, it further bolsters the notion of a promising “layer 2 summer” next year.
Potential Layer 2 Projects Set To Rally
With the above-mentioned factors, there’s no doubt Ethereum’s price could be set for an explosive run next year. However, there are a few other crypto projects built on top of it which could possibly create new all-time highs as well:
- Polygon (MATIC): Touted as the most robust Layer 2 solution, Polygon boasts a slew of crypto projects harnessnig its technology with notable partnerships which include like Nike, Adobe, Starbucks and even facilitated the minting of former U.S. President Donald Trump’s NFTs.
- Arbitrum (ARB): Arbitrum recently made waves with its native USDC launch which brings a host of useful parameters including faster withdrawals, upgradeable smart contract for future enhancements, and the possibility for institutional on and off-ramps.
- Loopring (LRC): Described as an open-source, audited, and non-custodial exchange protocol, Loopring utilizes zero-knowledge proofs, a popular means of enhancing privacy, to build decentralized exchanges.
2024 Bull Run To Mimick 2020 DeFi Rush?
Sassano concludes that the current bear market of 2022/2023 will serve as the foundation for a potential Layer 2 summer in 2024, just as the groundwork for the DeFi rally seen in 2020 was laid during the bear market of 2018 and 2019.
Echoing similar sentiment, the broader crypto community also eagerly anticipates the technical advancements, reduced fees, and the launch of new applications — thereby setting the stage for a much-needed bull run, driven by the growing influence of Layer 2 blockchains.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.