The Road to Mass Adoption

In today’s newsletter, I want to discuss something a little different, mainly because we are starting to see the emergence of a healthy, flourishing and ever expanding Ethereum Layer 2 ecosystem. And as we all know, these emerging protocols will play a huge role in securing mass adoption and ultimately bringing Ethereum to the world. As well as these thriving Layer 2 protocols we are also starting to see various bridges launch in order to help facilitate movement across expansive Layer 2 ecosystem. These bridges are basically providing us users with a way to move our funds across multiple Layer 2 scaling solutions, without having to withdraw our funds back to Layer 1 in order to do so.

We are now seeing the days where all the hard work from all the brilliant teams that have been working on this technology that is so desperately needed in order to scale Ethereum finally start to pay off. Although the Layer 2 ecosystem is still incredibly young, and it’s only just the beginning, I think many of us are already starting to harvest the fruits of this beautiful new technology, which just goes to show how much easier it is to live on layer 2 as opposed to layer 1. I guess I want to explain why I think all of this ties into mass adoption at the end of the day. As we all know, the more users that onboard into the Ethereum ecosystem, the higher the gas fees go. There simply isn’t enough block space to service the population on a global scale. But in saying that, recently users have still been willing to pay the high fees in order to interact with the Ethereum network, so we can only imagine what it will be like when users are able to participate within this ecosystem for a fraction of the cost.

I truly believe that the Layer 2 ecosystem will rapidly accelerate the global movement towards DeFi, there’s literally no reason not to anymore, gas fees are very cheap and transaction speeds are near instant. I will say this though, the main barrier I think between mainstream adoption and Ethereum is going to be the route that is currently required to get funds onto the Layer 2 ecosystem. At the moment users still have to purchase ETH through a centralized exchange and then send it to the Ethereum mainnet, followed by the user then having to bridge their ETH to a Layer 2 protocol. However, I don’t think that this will be a long term issue, and eventually I am sure that the brilliant minds within this industry will be able to create some form of fiat on-ramp that bridges funds directly between an exchange and a layer 2 network.

I think as well that forming the bustling scalable layer 2 ecosystem is still just the beginning on the road to mass adoption. However, I don’t think that this reality is as far away as most people think. Don’t get me wrong, it will still take quite some time, but we are already seeing mainstream institutions start to either get involved with DeFi/NFT’s or at the very least, gain exposure to them to see if this industry is for real. Institutions and major corporations are starting to notice us, and a lot of them want to be a part of the inevitable future that we are building, a fair and transparent global financial system that is far more efficient than what we are currently used to in the traditional world.

Take VISA for example. This company a few weeks ago actually purchased their own crypto punk, not only did they purchase it, but they also flaunted it on social media as well as news headlines. And to top that off, they only just recently announced within the last few days that they are currently developing a scalable Layer 2 ecosystem for global payments. Little is known about this as it was only just announced, so there is no current roadmap or timeline indicating how far through development this project is. But what we do know, is that Ethereum isn’t coming to the world, the world is coming to Ethereum. Plan accordingly.

Thanks for reading everyone!

Liam Donald

This newsletter is for educational purposes only and should never be considered as financial or investment advice