Posted 12 months ago | by Ben Armstrong
Ethereum based dApps Challenged by New Contenders
Ethereum based decentralized applications are the prime candidate for smart contract implementation. In particular, Ethereum has dominated the dApp market with the highest ranks in terms of actual users who are actively engaged with dApps
Over the past few years, the Ethereum network has grown into a fairly robust platform that can facilitate the ever-evolving world of technology and finance. The decentralized-focused ecosystem has brought innovative services such as dApps and DeFi to its platform.
Kevin Ho from Optimism, a firm specializing in a layer that uses two technology scaling Ethereum smart contracts and dApps up to 100 – 2000 transactions per second, was the guest on the latest episode of the Blockcrunch podcast.
Ethereum may See New Challengers
On the podcast, Mr. Ho emphasized the impact of Optimistic Rollups on the DApp ecosystem and its effect on the Ethereum network:
“Because you are able to get instant transactions on Optimistic Rollup and because there is nothing that can't be deployed on Optimistic Rollup that can be deployed on layer one, Ethereum. It really won’t make sense to be deploying contracts on the main chain, Ethereum. Instant transactions, incredibly cheap transaction fees, and, you still get the cross contract interactions that you would get on Ethereum layer one.”
Moreover, Mr. Ho went on to add that change is inevitable, he noted:
“We’ll really see a shift from all contracts being on layer one, to being on Optimistic Rollup and they still maintain that sort of DeFi type coupling that we’re seeing emerge today.”
More Competition Could be Good
The presence and dominance of the Ethereum network in the DApp ecosystem have been consolidated over the past few years.
In fact, according to the dApp report for 2019:
“Nearly half of active Ethereum DApp users have used DeFi DApps in 2019. 70% of the volume generated by the native ETH token was the use of decentralized exchanges and financial services, such as lending and etc.”
Mr.Ho also talked about the difference between ZK-Rollups and Optimistic Rollups. While ZK-Rollups use valid evidence to prove that transactions are valid, Optimistic Rollups use fraud proofs.
However, Optimism has shown that:
“Zero-knowledge validity proofs are a more secure solution but there are definitely some tradeoffs, one of which is that these validity proofs can’t verify arbitrary EVM computation. So you can’t do general solidity smart contracts on ZK-Rollups. It’s very much for transactions and for specific use cases like decentralized exchanges today.”
As the smart contract and dApp sphere sees more development, consumers and commercial users are likely to benefit for the increase in development culture, and a preponderance of new ideas.