Wednesday, September 27, 2023
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Ethereum’s Bull and Bear Case From a Crypto Investment Firm Exec

  • Katie Talati is the head of research at $600 million cryptocurrency investment firm Arca.
  • Executives break down potential barriers and catalysts for success on the Ethereum network.
  • According to Talati, Layer 2 can “turbocharge” the growth of the Ethereum blockchain.

Ahead of the Ethereum merge, investors and industry players are looking for ways to understand and take advantage of the network’s long-awaited technical upgrade.

Despite tough macroeconomic conditions, Ethereum’s native token Ether experienced a slight uptick on speculation over a merger, 2 month high August 11th. Cryptocurrencies have since fallen, perhaps on inflationary woes, but investors are wary of riskier bets.

Billed as a way to reduce network energy usage by over 99%, Merge moves networks from an energy-intensive Proof of Work (PoW) to a Proof of Stake (PoS) model.

The upgrade would be “the most ambitious thing the industry has ever done,” longtime blockchain developer Ben Eginton recently said. insider. According to Edgington, Merge is like “fundamentally redesigning a chain worth hundreds of billions of dollars and swapping engines mid-flight.”

To A fewThis is the most important event in the history of cryptocurrencies, shortly after Bitcoin and Ethereum were invented.

Ethereum as Current “Market Leader”

Just weeks before the upgrade, Katie Talati, head of research at $600 million crypto investment firm Arca, analyzed the case for both Ethereum’s bulls and bears in an interview with Insider.

Ethereum currently beats most other layer 1 blockchains in terms of market capitalization and also has the ability to keep developers on the network. (Bitcoin was the most valuable crypto at $19,758, according to data from Messari Meanwhile, Ethereum was trading at $1,502. )

Talati said that if the industry believes that cryptocurrencies have the potential to overthrow the internet, the industry will need “Layer 1 blockchains to emerge from the masses and differentiate themselves.”

“Ethereum has been the market leader in that,” she said, adding that this may “not last forever.”

Ethereum, whose introductory paper was published in 2014, also has a first-mover advantage in the nascent space. This compares to other layer 1 blockchains such as Solana and Avalanche, which had white papers published in 2017 and 2018 respectively.

“If you are a new developer entering the space, trying to learn the coding language for smart contracts, or trying to understand how to deploy an app on the blockchain, the Ethereum ecosystem has a lot more information. and support, better than the rest of the system as a whole,” she added.

Talati said that all blockchain success is not the end. There is still room for another Layer 1 to gain market share and smart to “crack the code” on the growing pains commonly associated with his contract network.

What is holding back Ethereum?

Compared to a wider range of tech companies, Talati said there is a lack of technical talent across cryptocurrencies. As soon as the industry onboards the ‘top quality engineers’, the industry can grow further and onboard more users.

More technical experience can independently fix the often-cited obstacles to using Ethereum’s network, such as scalability issues and hefty gas bills. I have a plan to address these issues in

“Not only does it affect fees, but it also affects the user experience,” she said of using Ethereum’s network.

For example, Yuga Labs, the company behind the popular NFT collection Bored Ape Yacht Club, has sold its Ethereum-based virtual land deed. brought Record high costs, network congestion, and even failed transactions.

“Sorry for turning off the lights on Ethereum for a while,” says Yuga Labs murmured After some confusion.

Looking ahead, Tarati says her concern with the Ethereum network is that its roadmap or plans for upgrades are not clearly outlined “in terms of what our next goals are.” has already done a lot of research on this, she added.

Layer 2s, frameworks or protocols built on top of the Ethereum network can also drive blockchain success, according to Talati. Developers can build decentralized apps (DApps) on top of these layer 2 along with NFT creation and other features.

Optimism, Arbitrum, Polygon, and Immutable X are all popular Layer 2 with lower gas prices and faster transaction times than their associated smart contract networks. For example, Polygon has secured his $5 billion in assets, hosts over 37,000 of his DApps, and records 154 million unique user addresses. An insider previously reported.

Talati said the Layer 2 market is “very fragmented,” but the Ethereum ecosystem allows more participants to participate.

“Layer 2 will definitely be the one that accelerates the growth of Ethereum,” she added.

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