How will new public chains and Ethereum evolve in 2022?

In 2021, DeFi grew at an unprecedented rate, with DEX volume tripled and total bandwidth (TVL) quadrupled. Ethereum shares have traded down more than a third in a year, as Ethereum exchange rates have risen sharply with the rise of L1, a new chain with faster exchanges and lower prices. . Crypto users are attracted by the new energy of the public chain ecosystem and the low cost, especially the top public chain EVM. For example, last year, BSC's TVL increased by 31,000%, from $62 million to $21 billion. As new chains develop, Ethereum L2 scaling solutions are released, and with the Ethereum 2.0 approach, the importance, complexity, and interoperability of cross-chains will continue to grow.

Creating a Multi-Channel World

Ethereum was completed several years ago (total revenues greatly exceeded Bitcoin). According to data from January 18, 2022, Ethereum's daily revenue was $46.3 million, while Bitcoin's daily revenue was only $380,000. Looking at the market numbers, the daily volume of the Ethereum network is around 1.28 million, which is four times that of the Bitcoin network, which shows the positive growth of Ethereum in the past year. Since then, Ethereum revenue has increased more than 50 times, while daily Bitcoin revenue has fallen by 66%.

Bitcoin remains the undisputed leader in the cryptocurrency industry. However, market interest and demand for smart contracts in application distribution is clearly stronger than market demand in terms of price, and applications such as DeFi, NFT and GameFi are all driving the development of Ethereum. However, this direct request increased the premium value of the Ethereum blockchain, increasing the cost charged by users.It is also easier than the average cost of token exchange, and the cost may be higher if there are interactions such as smart contracts that support the DeFi protocol.

The high market prices of Ethereum have forced many users to look for cheaper options. At the beginning of 2021, TVL for the Ethereum blockchain application accounted for 98.2% of the DeFi protocol. Now that number has dropped to 67%. The biggest winners are BSC, Solana, Terra, Avalanche, Fantom and Polygon.

L1 public channel address growth

Ethereum: As of January 1, 2021, the number of modern homes was 426,000, up from 800,000 in May, now around 558,000, with TVL at $153 billion.

BSC: As of January 1, 2021, the number of modern homes was 49,500, up from 1,624,000 in mid-October, now around 13,133,000, with a TVL of $19.07 billion.

POLYGON: As of January 1, 2021, the daily address count was 759, the October peak was 566,000, the current value is 367,000, and TVL is $4.59 billion.

AVALANCHE: As of January 1, 2021, the daily address count is 22, which now stands at 67,000, with TVL at $8.2 billion.

Compared to Ethereum, this new chain has unique advantages. However, at present, there is no optimal solution for the impossible triangle of blockchain: it is impossible to think about speed, security and distribution. Ethereum's PoW mechanism of around 2,500 core network nodes, which provides network security protection, increases the cost of hacker attacks, ensuring security and decision-making, but at a high-throughput cost , leading to limited crossing costs and high operating costs. .

The BSC uses the consensus of 21 consumer-trusted PoSAs to accelerate and reduce exchange rates at the expense of distribution. The downsides of this radical proposal are decentralization and poor security. For example, last September Solana, who had a similar deal, was hit by a DDoS attack and was down for over 18 hours. However, new chains that support cheap and fast trading are yet another option for many entrepreneurs, as most traders cannot afford the ten or hundreds of dollars of Ethereum's cost.Although there is much debate about the design and value of each public sector, the active development of several public channels now shows that as long as there are desired plans in the market, they will have a place in the to come up.

Consumers who value distribution and security are asked to pay a higher price for the industry, while users who have a better understanding of the fast and expensive market choose the new channel for the public. Although Ethereum management in DeFi fell sharply in 2021, revenue and TVL continued to rise, which is good for the healthcare sector as the rise of the new chain will continue to support local businesses. . new construction.

After June 2022, Ethereum will switch to PoS protocol, but according to the team's approach, Ethereum will need several years of upgrades to complete sharding, the final version of ETH2.0.The transition to PoS is an important step for ETH2.0, but an increase in the number of users will continue to jeopardize Ethereum L1 and will not allow it to be faster and costs to reach the same level as the new chain. (more on speed) will still not select Ethereum), and L2 on Ethereum has yet to be measured. Thus, the new chain in 2022 will not compete with Ethereum, but with Ethereum L2. Also, the interconnection of strings will become more important as new strings are developed in the industry.