People are ditching Ethereum layer-1 over Ethereum layer-2 and this is dumping ETH coin burn rate.
Ethereum is the second biggest crypto asset in the crypto market, just after Bitcoin. ETH is the native coin of the Ethereum blockchain. Through the EIP-1559 protocol, a part of the ETH supply continuously burns or we can say the EIP-1559 protocol helps the ETH coin to gain more increment in the trade price but in recent months it is found that the ETH burn rate is plunging significantly.
Crypto analytic data showed that ETH burns on 12 Aug was 570.54 ETH & this was the lowest since 1 Jan of this year. Earlier this all-time low burn rate of ETH on a single day in 2022 was 498.16 ETH.
According to experts, this dump in the ETH burn rate is showing that people are now more engaged on the Ethereum Layer-2 scaling network like Arbitron (ARB), Polygon (Matic) blockchain networks.
These layer-2 blockchain networks provide ETH transactions at very low fees & fast speed. So Ethereum Layer-2 networks help crypto traders in multiple ways to save time & money simultaneously.
Few experts noted that the majority of the Decentralised crypto exchanges or say Defi protocols are continuously moving toward the layer-2 scaling networks so that their customers can trade the Ethereum tokens at very low trade fees. And probably this is the reason why the activity of the crypto traders is plunging on the Ethereum layer-1 network.
Ethereum PoS & Future Efficiency
In September 2022, the Ethereum developers shifted the Ethereum mainnet blockchain network from Proof-of-work (Pow) consensus to Proof-of-stake (PoS) consensus. The main aim of such development activities was only to bring efficiency to the Ethereum layer-1 network.
According to Ethereum co-founder Vitalik Buterin, the efficiency in the Ethereum network will be visible in the next 3 to 4 years following huge development activities, and also appreciated the role of Ethereum layer-2 scaling networks.