The scalability issues faced by Ethereum have led many developers to consider alternative, more scalable blockchains to build their ideas on.
This situation has led to the come up of several new blockchains dubbed ‘Ethreum Killers’ which mainly include the following:
- Solana
- Avalanche
- Terra
Besides these blockchains, the advent of layer 2 solutions such as Polygon have also driven a lot of developer activity from the Ethereum mainnet.
These two factors have continued to drive down the total value locked (TVL) on Ethereum.
By April 2021, about 80% of all value locked in DeFi was on Ethereum. However, this figure, which was already declining, now stands at 65%, as Ethereum killers run riot.
If this was not enough, a 2022 report by crypto research firm, Electric Capital, found that Ethereum competitors, such as Polkadot, Solana, and Binance Smart Chain (BSC), are growing faster than Ethereum in terms of development activity.
However, talk to any sane person in crypto and they would tell you not to ignore Ethereum.
So what has Ethereum got going for it?
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SEE ALSO: 3 Structural Changes Coming to Ethereum in 2022
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1. ETH 2.0
Ethereum is on its way to becoming a full proof-of-stake (POS) blockchain as part of the Merge upgrade. This move will make Ethereum:
- 99% more energy efficient
- Expected to massively reduce gas fees
- Expected to massively ncrease transaction times
- Expected to increase the scalability of the applications running on the network
Besides the Merge, which is expected mid-2022, the blockchain is also introducing sharding where activity will be distributed, all calculated to increase efficiency for users and developers on Ethereum.
2. First Mover Advantage
Ethereum holds a sacred place in Web3 history. It is the blockchain that introduced the idea of using blockchains not just as a system for a currency (bitcoin), but as a system for decentralized applications (dApps) that could be applied for solutions in finance and other areas.
Being the first blockchain to efficiently deploy smart contracts, and subsequently, the running of dApps, means the support and community around Ethereum is huge.
One way this advantage plays out is that if developers have questions, somebody else probably had the same question in the last 5 and a half years, meaning the answers are likely to be available – a factor incredibly important in any disruptive tech sector.
3. Blockchain of Choice for Stablecoins
Stablecoins are key to enable transactions in DeFi as they let users switch value across different currencies and blockchains without the risk of volatility.
Ethereum’s flexible digital contract functionality lends itself extremely well to the issuance of stablecoins. The two stablecoins with the highest significance are Tether ($USDT) and $USDC – both based on Ethereum.
The 3 reasons covered in this blog are integral reasons why developers should still consider building on Ethereum besides the its current scalability concerns. In any case, the first reason, upgrade 2.0, alone is hoped by many to finally put to bed the scalability issues.
