Published on: 19/02/2024
The year is 2024, and it is rapidly shaping up to be the most historic year in the evolution of the Ethereum network. Chains Development Kits (CDKs) are paving the way for nearly endless opportunities in the Ethereum development ecosystem. With the potential approval of an Ether (ETH) spot exchange-traded fund (ETF) in the United States hanging in the balance, this year promises to be one of unprecedented relevance for Ethereums bull cycle.
Noteworthy to recount is the first bull cycle that the network has experienced since the 2022 Merge, an update that essentially rendered ETH deflationary in periods of peak network use. Since the Merge, a total of 0.2% of the Ether supply has been reduced, and with the inevitable increased network usage over the forthcoming months, this figure is set to further incline.
The game-changer of 2024, however, centers around an impending Ethereum network upgrade known as the Ethereum Improvement Proposal 4844. The focus of this upgrade is to render Layer-2 (L2) blockchains, which are centralized around Ethereum, up to ten times cheaper than they currently are. This monumental shift is expected to have unprecedented positive implications for Ethereum and associated L2s.
A fundamental understanding of Ethereum helps shed light on these projections. While Bitcoin, for example, is a simple asset with a value tied directly to the function of a blockchain, Ethereum is an entirely different beast. Ethereum serves as a shared, programmable database and a platform to develop decentralized applications (DApp). This unique identity requires that Ethereum must host valuable applications to have intrinsic value.
Historically, the main deterrent for non-native Web3 applications to become mainstream has been the lack of proper guidance. In most cases, companies enthusiastic about adopting blockchain technology lacked understanding about the business opportunities it offered or the necessary guidance on how to implement it. However, with the emergence of leadership at big companies advocating the adoption of blockchain applications and understanding the profits they promise, the blockchain ecosystem is becoming specialized.
As an example, big players in Layer-2 blockchain like Polygon are starting to create subchains dedicated to distinct use cases, providing not just generalist chains but also catering to specific enterprise requirements. This new approach is just one example of how the impending paradigm shift will dominate 2024.
This newfound exploration and development of Layer-2 blockchains will not merely remain restricted to select players. Many leading L2 blockchains are expected to follow suit, spiraling 2024 into a battleground of specialized subchains, all vying for dominance.
This transformation could herald the emergence of killer apps of Web2 finally succeeding in the realm of Web3 in 2024. It has the potential to mark the start of a retention cycle where blockchain consistently becomes a part of companies and users daily lives, laying the foundation for Web3 integration.
For investors, the development signifies a massive leap into an era of digital assets where the value of Ethereum could rise due to its increased utility and reduced limitations and a greater acceptance and usage of cryptocurrency in the mainstream business world. Therefore, 2024 is expected to not only be the year of layer-2 blockchains but also the biggest year for the Ethereum network.
All eyes are now on the unfolding narrative of Ethereums journey. Highly anticipated changes are set to revolutionize the digital currency landscape. With these sweeping changes, investors intending to cash in on this digital gold rush would do well to be ready for the thrilling ride that is seemingly just around the corner. Market sentiment is positive, and the Ethereum networks evolution is certainly something to watch out for in 2024.