95% Fee Reduction Sparks 99% Revenue Shift: Ethereum’s Layer-2 Network Dilemma Unpacked!

Ethereum co-founder Joseph Lubin has claimed that ETH’s long-term success depends on layer-2 (L2) scaling solutions. Speaking at the Digital Asset Summit, Lubin stressed how Ethereum’s security and developed infrastructure make it the best foundation for improving networks, allowing developers to build without the need for a new layer-1 network.

Is The Rise of Ethereum Layer-2 Networks Undermining Its Capabilities?

Lubin further claimed that Ethereum’s ecosystem is vast and secure, making it an ideal base for new blockchains and Layer-2 networks. He mentioned Linea specifically, a scaling network developed by ConsenSys (also co-founded by Lubin), as a burning example of Ethereum’s constant development. He also discussed MegaETH, an upcoming Layer-2 project designed to improve Ethereum’s utility while keeping transactions fast and affordable.

However, the rapid rise of Layer-2 solutions has sparked concerns among investors. With over 140 scaling solutions and 60 roll-up networks currently operating on Ethereum, some worry these platforms could redirect revenue from the main blockchain. A major turning point came after the Dencun upgrade in March 2024, which reduced Ethereum transaction fees by 95%. While this significantly benefited L2 networks, it also caused a 99% decline in base-layer revenue by late 2024.

Layer-2 Crucial For Ethereum Growth: Joe Lubin

Despite these concerns, Lubin has expressed confidence in Ethereum’s future and superiority over the L2 solutions. He argues that while new layer-1 blockchains spawn each passing day, they struggle to compete with Ethereum’s security, overall activity, and network. Rather than seeing Layer-2 networks as threats, he firmly believes they are crucial for Ethereum’s growth and long-term viability.

Ethereum’s future, according to Lubin, is not about replacing the base layer but expanding through interconnected networks. Whether this model proves sustainable in the long run remains to be seen, but for now, Ethereum is doubling down on Layer-2 as the way forward.

As everyone watches Ethereum price action closely, let’s dive into a detailed analysis of Ethereum’s performance in the last 24 hours and analyze what’s next on the charts.

ETH Price Analysis of the Last 24 Hours

Ethereum started the day on a high, trading at $2,066, also marking the end of an uptrend. A death cross appeared at 00:15, and the ETH price dipped to $2,023 within half an hour. At 02:05 a slight golden cross formed on the MACD, suggesting possible reversal, but only ended up with a brief uptrend. The overall downtrend continued as ETH was seen trading at $2,003 by 8:00 AM UTC. The price seemed to recover a bit, but the buying pressure soon ran out of steam. Another death cross at 9:20 led Ethereum into a decline, taking it to $1978.

A period of heavy fluctuation followed. Supported by a golden cross, the ETH price tried to make a recovery, but rapid action on the MACD corroborated a similar trend on the price charts. The price spiked upward, going to $2,008, as it was pulled back down as a steep downtrend followed. ETH ultimately found support $1,953. Another attempt at a slow recovery began, but the price faced heavy resistance at the $2,000 mark. Soon enough, the buying pressure built up at the onset of March 21 cooled down, and a slow extended downtrend formed. 

ETH Price Prediction: Can Ethereum Get Back to $2,000+ Levels?

As the EMAs continue to play together, Ethereum seems to be stagnating just under the $2,000 mark. Buying pressure has also seen short spurts with no sustenance. Given that, Ethereum making any more rapid price movements seems unlikely for the first half of the day. However, if an upward spike takes the ETH price across the $2k mark, we can soon see new support, which will act as a base for further upward movement. 

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