2024 narratives – layer-2 networks
As 2024 approaches, Hashing It Out is focusing on the narratives predicted to take center stage in the crypto conversation in the new year. In episode 41, Mark Smargon, CEO of Fuse – the public blockchain ecosystem for Web3 payments – explains how Layer-2 networks have become the center of attention in the crypto space.
Smargon predicts trends in the sector, such as a greater focus on zero knowledge (ZK) technology, how far Layer 2 has come, their role in adoption and overall momentum.
He breaks down the origins of the idea of layer-2 networks, explaining that it all started with the painstaking task of solving the scalability issues of the original layer-1 blockchains. He added that Layer-2 networks solve the intractable scaling problem by doubling network capacity. They are very prevalent in the Web3 space due to the consistent nature of transactions, making them difficult for users and developers to ignore.
In light of the criticism that Layer 2s divides the user base and liquidity of their ecosystem, Smargon believes that leveling bridges and preventing hacks against them are more important issues. They argue that user fragmentation and liquidity can be dealt with if speed and security with the bridge are significantly improved. He explains that currently, Bridge is a very painful experience that prevents adoption.
Smargon highlights the trend of more Layer 2 networks gravitating towards ZK technology. He describes it as the endgame for most networks because it allows them to verify things without needing all the data, which reduces storage costs and increases privacy.
That's why Fuse's CEO announced that it's building a ZK-powered Layer-2 solution powered by Polygon's CDK specifically for payments. ZK believes technology will make it easier for businesses to provide some privacy, while conforming to international regulations.
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“So if you want to improve with Visa with zero-knowledge proofs, it's important to do off-chain transactions and improve privacy. Blockchain technology is not only practical or comparable to Visa, but it surpasses Visa in all aspects.”
Listen to the full episode of Hashing It Out with Smargon on Spotify, Apple Podcasts or TuneIn. You can also view Cointelegraph's catalog of informational podcasts on the Cointelegraph Podcasts page.
This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.
