Increasing number of people adopting EVM alternatives for Ethereum in 2024, Flipside reports
The demand for affordable alternatives to Ethereum is expected to drive the development of more layer-2 projects focused on reducing costs for end-users, according to blockchain data platform Flipside. In a recent research report, Flipside predicted that Ethereum will face increased competition in the blockchain space by 2024 due to the growing demand for cost-effective options and the rise of Ethereum Virtual Machine (EVM)-compatible layer-2 networks. Many EVM users are actively exploring alternative options to Ethereum because of the lower fees and faster transactions offered by emerging layer-2 solutions. This shift is significant as previous bull runs driven by Ethereum-based protocols resulted in high transaction costs. Additionally, the competitive landscape is being shaped by the increasing number of EVM-compatible layer-2 networks, prompting layer-2 projects to prioritize cost reduction for end-users. Governance tokens of layer-2 networks like Optimism (OP), Arbitrum (ARB), and Polygon (POL) are gaining renewed attention as part of this evolution. Furthermore, Ethereum’s planned Dencun upgrade, which includes the introduction of “blobs” that enable the storage of large data on Ethereum blocks through EIP-4844, is expected to intensify the competition. Flipside believes that blobs will improve block space on the mainnet and enhance throughput for layer-2 networks, challenging Ethereum’s dominant position. Analysts at Galaxy Digital, the crypto bank founded by Mike Novogratz, share a similar sentiment and anticipate a pivotal year for Ethereum in 2024 as other layer-1 blockchains increase their stakes. Galaxy Digital highlights Ethereum’s modular architecture, particularly diverse rollup types, as a potential source of challenges and technological risks due to their early stage of development. The report identifies Solana as the primary contender with its distinctive monolithic architecture, positioning it as Ethereum’s main competitor this year.
