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The previous few months have seen Ethereum rocket up the charts by leaps and bounds, with the same, along with the larger market’s comeback, allowing many in the mainstream to finally go beyond Bitcoin. In reality, institutional inflows into Ethereum have been continuously increasing as well.
However, this does not mean that it is without flaws. Indeed, difficulties like as scalability and high gas prices have frequently been mentioned. While concerns about the same had previously been mitigated by the ongoing shift to 2.0, the advent of “ETH-killers” like Solana and Binance Smart Chance has put a wrench in the works.
Indeed, according to Synthetix’s Cain Warwick, the aforementioned limitations have both led to the opening of a market potential.
In a recent essay, we discussed whether Binance Smart Chain will be able to benefit. But what about Solana? The executive stated,
“Once it [Solana] gains momentum, it will be hard to unwind because they are building a parallel ecosystem with different engineers and different skillsets and different approaches.”
In light of the same, and the fact that BSC is also expected to draw on the “overflow of activity,” at least in the near term, where can we see Ethereum heading? For financial applications, Warwick believes, Ethereum remains the place you go to as long as you’re not very concerned with throughput, with the exec going on to cite the utility of using Ethereum to issue a bond rather than as a platform to onboard 100M users.
Given these worries, it is natural that many in the community are hoping that if EIP-1559 is approved in July, the dominant narrative, which includes Ethereum, Solana, and BSC, will shift. Unfortunately, Synthetix’s Warwick and Multicoin Capital’s Samani have opposing views, with the former claiming that “it will only make it worse.”
The price of ETH is projected to skyrocket as a result of the aforementioned plan, which, according to Warwick, will ensure that the “wealth effect” does not spread as widely as it should due to the amount at which most of these individuals would be joining.
“If ETH continues to appreciate and get to a point where it’s worth either 10 grand or 20 grand, it actually makes it harder for someone new to enter the space. How aligned would you feel if you own just 200 millionth of a network with that kind of money?”
It’s worth noting here that the exec remains confident that the launch of layer 2 tokens will “allow people to get in early at a lower price point and at a lower network value.”