Layer-2 Networks: The Center of Attention in the Crypto Space
As we approach 2024, the conversation in the cryptocurrency world is increasingly focused on layer-2 networks. In Episode 41 of Hashing It Out, Mark Smargon, CEO of Fuse — a public blockchain ecosystem for Web3 payments — highlighted the progress made in this sector and the trends that are likely to dominate in the near future.
Smargon explained that the concept of layer-2 networks originated as a way to address the scalability issues faced by major layer-1 blockchains. He noted that layer-2 networks provide an affordable alternative to users and developers, thus becoming an attractive option in the Web3 space.
When asked about the criticism of layer 2s fragmenting the user base and liquidity of an ecosystem, Smargon argued that the focus should be on improving the speed and safety of bridging. According to him, if bridging is made smoother, then fragmentation and liquidity issues can be addressed.
The conversation also touched on zero-knowledge (ZK) technology, which is expected to become more prominent in the crypto space. Smargon believes that this could be a major trend in the sector, as it has the potential to revolutionize the way we interact with the blockchain.
Crypto Trends and Layer 2 Networks
Smargon recently discussed the trend of layer 2 networks gravitating towards zero-knowledge (ZK) technology on his podcast. He described it as the end-game for most networks because it allows them to prove things without needing all the data, thereby reducing storage costs and increasing privacy.
This is the reason why Fuse network announced that it is building a ZK-powered layer-2 solution powered by Polygon CDK specifically for payments, according to the Fuse CEO. He believes that ZK technology will make it easier to maintain privacy while complying with global regulations.
Listen to the full episode of Hashing It Out with Smargon on Spotify, Apple Podcasts, or TuneIn. You can also check out Cointelegraph’s catalog of informative crypto podcasts on the Cointelegraph Podcasts page.
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