Unforeseen obstacles pose unparalleled trials
Galaxy Digital, the crypto bank founded by Mike Novogratz, has stated that 2024 will be a critical year for Ethereum, as it faces unprecedented challenges from other layer-1 blockchains. In its “Watch This Space” report, Galaxy Digital highlights Ethereum’s efforts to support layer-2 networks and integrate technologies like restaking. However, it also acknowledges the emergence of alternative networks like Celestia, which offer a high level of flexibility in meeting diverse user needs in terms of privacy, cost, security, and compliance.
According to analysts at Galaxy Digital, Ethereum’s modular architecture, particularly various rollup types, will introduce new challenges and technological risks due to their early stage of development. They specifically point out Solana as the most notable general-purpose blockchain that follows a monolithic architecture, positioning it as the primary competitor to Ethereum.
The Ethereum blockchain relies on validators to secure its network, but there is a limit to the number of validators that can join or leave the network in each epoch. As Ethereum continues to grow, the limit for validator entries and exits has also increased. Galaxy Digital suggests that Ethereum developers may need to consider significant changes to staking dynamics and monetary policy in 2024 if the network experiences a surge in usage, leading to higher transaction volumes and staking demand.
