Ecosystem Thriving, Prices Rising! Ethereum Founder: Abundance of Layer 2 Solutions Set to Launch

While the launch schedule of Ethereum 2.0 is uncertain, progress has been made with the second-layer solution OMG Network, shedding light on Ethereum's scalability. Ethereum co-founder Vitalik Buterin also tweeted that the second-layer solution has achieved initial success, awaiting further deployment.

If you are curious about second-layer (layer 2) solutions addressing scalability issues, you can refer to the article on Zombit Knowledge here.

Long-standing Network Congestion Issue

Ethereum often faces transaction cost increases and a decrease in average transaction processing speed due to network congestion, with scalability remaining a hot potato for Ethereum developers. Recent reports highlighted Ethereum's weekly transaction fees hitting a high not seen since 2018. According to ETH Gas Station, as of today, USDT and Ponzi scheme fees still dominate the top six on the Ethereum network.

However, this problem may soon be resolved as per an announcement from OMG, the OMG Network V1 public mainnet Beta version can scale Ethereum to process thousands of transactions per second while reducing transaction fees by one-third.

Furthermore, the exchange Bitfinex has announced the integration of Tether's USDT with the OMG Network, making transactions with USDT on this network faster and cheaper. Ethereum founder Vitalik Buterin tweeted:

While nobody's looking, layer 2 scaling solutions on Ethereum are quietly succeeding. Just wait for the refinement and deployment.

While everyone wasn't looking, the initial deployment of ethereum's layer 2 scaling strategy has *basically* succeeded. What's left is refinement and deployment. A thread: https://t.co/30Dfr9XmFs

— vitalik.eth (@VitalikButerin) June 1, 2020

The second-layer solution allows transactions to be processed outside the Ethereum main chain. Running USDT transactions via the OMG Network may help alleviate the current network congestion on Ethereum. However, Vitalik believes that the challenge lies in adoption rather than the technical aspect.

User Adoption is the Real Challenge

Vitalik stated that currently mature systems are limited to payments and decentralized exchanges (DEX). Token transfers, DEX, and USDT still dominate most activities on the Ethereum network. Can at least some transactions be executed through "Plasma," "Rollup," and other second-layer solutions? He pointed out:

The challenge lies in users needing a wallet based on Rollup or Plasma to store cryptocurrencies. This is a challenge of adoption rather than technology, and it is essential to ensure that users are comfortable with the second-layer solution.

Vitalik also suggested that all second-layer systems should undergo an exercise, shutting down all running centralized systems to observe whether the entire ecosystem can quickly recover in such a scenario.

Despite Tether's announcement of issuing USDT on the OMG Network, its widespread adoption is still pending, and the extent to which it can alleviate Ethereum network congestion remains uncertain. Vitalik mentioned that the actual throughput of these solutions will be around 2500 TPS, not as high as claimed by most projects, but still a significant improvement compared to Ethereum's current 15 TPS limit.