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Vitalik Buterin highlights Layer 2 technology for DeFi growth

Vitalik Buterin highlights Layer 2 technology for DeFi growth

Grafa2024/09/16 22:15
By: Liezl Gambe
ETH+0.82%XOLDTOKEN0.00%TAIKO+1.38%

Vitalik Buterin, co-founder of Ethereum (CRYPTO:ETH), emphasised the critical role of Layer 2 technology in the future of decentralised finance (DeFi) through his X account. 

He highlighted that the significant reduction in costs associated with Layer 2 solutions is a key factor for broader DeFi adoption. 

Buterin noted, “Low transaction fees are the cornerstone of the cryptocurrency market’s success,” emphasising that although this goal was initially proposed in 2020, it is becoming a reality with advancements in Layer 2 technology.

Buterin pointed to Taiko, a rollup-based decentralised Layer 2 solution, as a strong example of how reduced fees can be achieved without compromising decentralisation. 

He asserted that DeFi can only reach mainstream adoption if transaction fees are kept low, a barrier that the cryptocurrency market has yet to fully overcome. 

However, decentralised Layer 2 solutions like Taiko offer promising advancements in tackling high transaction fees, which are seen as a significant obstacle to growth.

Robert Sasu, a core engineer from MultiverseX, responded to Buterin’s remarks by suggesting that while Layer 2 technology has the potential to reduce fees, it often relies on centralised architectures in practice. 

He argued that this reliance undermines the core principle of decentralisation that blockchain technology is built upon. 

Sasu called for more decentralised solutions to address this issue.

In response, Buterin disagreed, highlighting that Taiko's model has successfully achieved low transaction fees while maintaining decentralisation. 

He emphasised that Taiko’s success shows the feasibility and affordability of truly decentralised Layer 2 solutions, setting a strong precedent for future projects.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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