Mar 24, 2022
Wisdom Oparaocha On Unlocking the Power of Ethereum and Multichain Technology 🦸‍♂️
The blockchain industry has become a large ecosystem of ever-growing patronage despite early concerns and fears. The decentralised financial system is gaining popularity among governments, businesses, investors, and individuals.
However, despite its growth showing no signs of slowing down, it is threatened by congestion and scalability concerns. This results in a poor user experience as users are charged higher transaction fees.
Furthermore, amid advancing innovations to amend this unpleasant experience, users experience slow transaction processing times. These problems have increased all blockchain networks, resulting in calls for lasting solutions.
In the case of Ethereum, these problems are pervasive. In this regard, many developers have sought other networks such as Solana or Cardano for higher transaction processing times.
The adoption of these solutions is popularly considered a means to overhaul Ethereum. However, against popular belief, it is imperative to note that these solutions are being implemented to provide a multichain approach for Web 3.0.
This comes on the heels that for DeFi to remain popular, developers need to address scalability and congestion problems as a shared burden that requires a collective effort to solve. This concept of cooperation brings the idea of Multichain Technology to the fore.
Multichain is an open-source ecosystem of interconnected blockchains. This ecosystem is developed to facilitate a friendly user experience, improved efficiency, and greater usability. This implies that data will be transmitted easily and faster across many sectors. In a similar vein, data transmission will be more secure and simple.
The benefits of the multichain technology extend to supply chain management, wherein blockchain interoperability can be used to ensure low investment costs. This is achieved by allowing users to develop private blockchains for facilitating financial transactions according to their requirements.
Multichain technology is dependent on cross-chain solutions, i.e., it is a means of connecting the several chains existing in isolation. Furthermore, multichain technology offers a pleasant user experience, such as supporting users to authorize many assets and transactions, advanced data sharing, and data encryption.
SushiSwap and Aave are popular exponents who adopted the multichain technology early. Now existing on 13 chains, SushiSwap continues to fuel speculations of multichain’s development with optimism. Multichain or cross-chain aggregators find the most efficient ways to complete deals between blockchain ecosystems like Ethereum.
As a result, they make it easier for existing blockchain users and lower some entrance hurdles for newcomers. Apeboard is an example of an aggregator, which allows users to track their portfolios across multiple platforms. Apeboard is compatible with 11 different networks, including Ethereum.
As a result, it’s ideal for keeping track of assets across multiple chains and keeping track of balances. The most promising development which stands in the way of a future of interconnected blockchain is ETH 2.0.
The ETH 2.0 is a promising upgrade that will solve the problems of congestion and scalability on the Ethereum network. This advancement will ultimately lower transaction processing fees and faster processing times. This will boost the waning popularity of the network among developers.
Ethereum hopes to achieve this feat by changing its consensus mechanism from Proof-of-work (POW) to Proof-of-stake (POS). Ethereum already permits asset transfer on Layer 2 rollups — off-chain aggregators of transactions inside an Ethereum smart contract.
Expanding the blockchain’s throughout hopes to cut transaction fees and congestion. Layer 2 solutions are widely believed to play a key role in helping Ethereum gain general acceptance. Layer 2 technology is expected to process between 2,000 and 4,000 transactions per second, which is already close to Visa’s processing capabilities.
Ethereum will be able to harness some strong economic bandwidth in conjunction with the scalability of Layer 1 with Ethereum 2.0 and Layer 2. Indeed, if ETH 2.0 is fully implemented, developers may no longer feel the need for multichain because Ethereum will supply them with all they require.
It is worthy to note that both promising technologies are lasting solutions to the problems of congestion and scalability. However, the launch of ETH 2.0 is a live threat to the dream of a multichain future in blockchain. This comes despite the belief that multichain technology is vital for the adoption of Web 3.0, which will result in a hitch-free user experience for developers.
By Wisdom Oparaocha
Contents distributed by Learn.Block6.tech
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