The negative feeling around Ethereum This appears to be significant, as current data shows that the ETH network is experiencing a notable drop in activity, with the number of transactions falling to its lowest level in the last 5 months. This drastic drop coincides with a larger decline in the cryptocurrency market, marked by a reduction in investor interest and trading activity.
Ethereum main chain sees lower engagement
TOBTC, a trading platform disclosed the negative developments in the crypto community on the X platform (formerly Twitter). Given the broader bearish outlook for the market, the drop in activity raises questions about Ethereum’s near-term prospects.
It is noteworthy that the decline occurs after ETH The ETH network has recorded its highest number of transactions in almost two years. In January, the impressive number of monthly transactions executed on the ETH mainnet stood at 36.02 million. However, it seems that users are considering other alternatives for their daily activities.
According to the trading platform, activity on Ethereum has slowed, suggesting a shift in user adoption of the network. Specifically, the seven-day moving average stood at 1.12 million transactions in a day, a level not seen since February. This is the lowest number of transactions recorded on the network in five months.
The reduction in the number of transactions on Ethereum may have had a significant impact on the network, but TOBTC noted that this development is not only contributing to the slowdown in activity. The slowdown was also triggered by the network’s active wallet addresses, which have decreased to around 400,000, as reported by TOBTC.
TOBTC also pointed out that while the main chain appears to be taking a break, Ethereum layer 2 solutions fill the gap, drawing attention to the Base Network, a Layer 2 solution backed by Coinbase. This is due to the network’s position as one of the leading solutions, with a remarkable 3.83 million transactions in a single day.
BaseThe increase in transactions simply highlights Layer 2 solutions as a preferable mining choice over the Ethereum mainnet among users, as these networks provide much cheaper and faster transactions while retaining Ethereum’s strong security features.
Layer 2 solutions are poised to solve interoperability challenges
As the Web3 ecosystem evolves, interoperability between different networks is a major issue. However, Ethereum co-founder Vitalik Buterin believes that ETH’s layer 2 networks are poised to solve these long-standing ecosystem-wide issues.
In the X jobButerin said that many people will be surprised at how quickly the interoperability issues between Layer 2s will disappear and the Ethereum universe will become a seamless place to use it. Buterin is confident that these issues will soon cease to exist due to the growing desire and shared determination he has observed within the ecosystem in recent times.
The co-founder’s remarks demonstrate his strong belief in the ability of Layer 2 solutions to improve the decentralized environment and transform blockchain interoperability.
Featured image from Adobe Stock, chart from Tradingview.com
