<2> Ethereum, Solana Defy L1 Myth — Bitwise CIO Sees Prediction Markets Changing Everything
<3> The Rise of Layer 1 (L1) Scalability
In recent years, the concept of Layer 1 (L1) scalability has become a hot topic in the cryptocurrency space. L1 refers to the underlying blockchain protocol that enables transactions and smart contracts. Ethereum, the largest decentralized application (dApp) platform, has long been considered a Layer 1 blockchain. However, recent developments suggest that Ethereum and other Layer 1 blockchains are not as limited as previously thought.
<4> The Emergence of L1 Scalability Solutions
Ethereum’s transition to a proof-of-stake (PoS) consensus algorithm, known as Ethereum 2.0, has brought significant improvements in scalability. The introduction of sharding, a technique that allows multiple chains to process transactions in parallel, has increased the network’s capacity to handle a large number of transactions. Moreover, the development of layer 2 scaling solutions, such as Optimism and Polygon, has enabled faster and cheaper transactions on the Ethereum network.
<5> Solana’s Innovative Approach to L1 Scalability
Solana, a relatively new blockchain platform, has taken