Bitcoin Layer 2 options have gained vital traction this yr however have additionally drawn their justifiable share of criticisms. Mempool founder Mononaut has strongly criticized them and identified a number of drawbacks from a technical standpoint.
Apparently, Mononaut’s stance positive factors help as Bitcoin Ordinals founder Casey Rodarmor.
Bitcoin Layer 2 Beneath Hearth
The principle goal of Bitcoin Layer-2 networks – which function secondary protocols constructed on prime of the Bitcoin blockchain – is to enhance scalability and transaction effectivity. That is achieved by offloading transactions from the primary blockchain, resulting in quicker transaction processing and decreased congestion, in the end leading to decrease charges throughout the Bitcoin community.
Layer 2s additionally allow builders to combine good contract functionalities on the blockchain, thereby extending the capabilities of the protocol.
Info. https://t.co/DuEOB4dXlN
— Casey (@rodarmor) April 11, 2024
Nevertheless, not everyone seems to be a fan of this idea. Mononaut, for one, has discovered varied elements of those implementations defective. In a sequence of tweets, the Mempool founder argued that if a Bitcoin Layer 2 resolution lacks help for the unilateral exit, it basically features as a multi-signature system fairly than a real Layer 2 resolution.
Mononaut additionally criticized Layer 2 options that contain enterprise capital buyers and introduce their very own tokens, calling them comparable pump and dump schemes.
He additionally mentioned those who supply “reciprocal rewards” based mostly on deposit quantities aren’t any totally different from pyramid schemes whereas concurrently warning the Layer 2s which might be backed by upgradeable Ethereum contracts and managed by a single entity. He views these to be potential rug pulls ready to occur.
Based on Mononaut, Layer 2s that incentivize locking up cash for prolonged intervals are much like earlier scams reminiscent of Hex 3.0. Furthermore, Mononaut cautioned in opposition to these options that declare to be Bitcoin-native however are literally Ethereum multi-signature programs, labeling them as affinity scams.
He went on to focus on the hazard of those programs that lack complete technical documentation, equating them to the notorious Bitconnect rip-off disguised with superficial data.
Bitcoin Layer 2 Explosion This Season?
Outstanding Bitcoin educator Dan Held, who can be one of the vital vocal proponents of Layer 2s on Bitcoin, expects an explosion of such options because the bull run unfolds.
In an interview with CryptoQuant, Held mentioned that the prevailing Layer 2s, reminiscent of Lightning Community, Liquid, and the lesser-known Rootstock, have their very own inefficiencies however nonetheless believes that the newest resurgence might pave the way in which for a lot of new gamers.
“We’re seeing numerous contenders popping out of the woodwork. Once we have a look at how this can play out, I don’t assume there’s going to be a winner-take-all-all. There are numerous totally different Ethereum L2s, some extra profitable than others, however I don’t assume there’s a winner beat all. We’re going to see an entire spectrum of several types of floor space for design and market technique. We’ll see an explosion of Bitcoin L2s and possibly a few of these will likely be tens of billions of {dollars} market cap.”
LIMITED OFFER 2024 for CryptoPotato readers at Bybit: Use this hyperlink to register and open a $500 BTC-USDT place on Bybit Trade without cost!
