Although it may still be the main network center for rebel activity, smart contracts, and NFTs, bridges built using competitive networks like Tezos may pose serious challenges to Ethereum’s market share in these areas.
New ways to solve old problems may undermine the performance of the network
Since the launch of the network, the Ethereum killers have been known for they will replace the network with faster transaction speeds, greater scalability, lower fees, and effectively do everything better.
Despite the hype surrounding the answers to these Ethereum vulnerabilities, no network can completely replace the attractiveness of the network. However, the flaws of Ethereum are currently being attacked by all parties and are more serious than ever.
The WRAP protocol recently released by Bender Labs is one of several arrows that may seriously damage the status of Ethereum. This highly interoperable decentralized protocol will enable Ethereum tokens including ERC-20 and ERC-721 standards to be converted and transferred to the Tezos blockchain.
Ethereum tokens are effectively locked on the blockchain through this protocol, and then a “wrapped” version is created on the corresponding network (Tezos in this case). The base value of the wrapped version uses the $WRAP native token to bind with the actual token to be copied to coordinate the conversion. Then, all packaged Ethereum tokens are compatible with Tezos’ FA2 standard, allowing them to be used freely in the network.
A severe challenge to the status quo
Although defeating Ethereum is not the goal proposed by Bender Labs, the idea of building a more open and interoperable decentralized financial system does challenge the dominance of the network, especially in Defi and smart contracts.
The “bridge” of this new agreement will enable token holders to move freely between the two ecosystems with minimal conversion costs, provide more choices, and provide users with the opportunity to vote with their feet.
Given that Tezos now owns Ethereum, compared to Ethereum, its ecosystem is much cheaper for developers and users, thanks to its consensus on proof of stake, this new discovery The ability to seamlessly migrate between chains poses a serious threat. Moreover, the self-upgradable nature of Tezos means that it will be much easier to adjust the network in the future compared to the long-term upgrade process of Ethereum.
Unpredictable adoption path
Ethereum’s soaring fees are difficult to predict reliably, and it has become a catalyst for the loss of developers and users. It is hard to deny the appeal of Tezos’ lower transaction costs, and the user experience has not changed significantly.
However, although it looks like an Ethereum killer in some respects, in the long run, the WRAP protocol may have the opposite effect. By providing users with a nearly frictionless way to switch between ecosystems, Ethereum may actually benefit from expanded use.
how is it? Quite simply, if defi becomes more competitive and the use of smart contracts expands, then the two networks may compete for demand, because each network will continue to upgrade and innovate to attract participation. If the final innovation lowers costs, it will attract more participation from users and developers, thereby effectively expanding the range of crypto users instead of dispersing them in the middle.
Although the discussion about the impending demise of Ethereum will surge, the WRAP protocol is still a serious attempt. Even with the forward-looking nature of Ethereum, it may have a short-term impact on the network.
Do you think fierce competition with Ethereum will harm the network or make it stronger? Let us know in the comments section below.
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