Rollup to Preserve Ethereum’s DeFi Monopoly Despite Competitors: Messari

Cryptographic data aggregator Messari believes the roll-ups will beat level one solutions in the race to scale Ethereum.

Although the genesis of the Eth2 beacon chain was successful on December 1, analysts predict that updates covering the Ethereum 2.0 revision will not be completed until 2022. Therefore, Messari recently affirmed the wait for the completion of Eth2 “leaves an opportunity for other low-cost, low-latency competitors to devour the Ethereum monopoly.”

“Those bitten by the snake due to increased fees will inevitably explore alternative platforms with better transaction throughput and lower rates if they haven’t already.”

Despite praise for Near, Cosmos and Solana’s efforts to build interoperable bridges with Ethereum and moves to develop Ethereum virtual machine-compatible scalable chains from Polkadot and Avalanche, Messari predicts that the second tier roll-up solution will surpass the level one networks as the temporary scaling solution chosen by the cryptographic community.

Messari describes the roll-ups as “new blockchains that process transactions independently of Ethereum” before sending the transactions to the main chain in batches. Unlike level one solutions, Messari complaints that roll-ups can satisfy computational processes “without bogging down the underlying network with excess data and computation demands.”

Messari also claims that Ethereum’s strong community will dissuade developers from wandering elsewhere, tweeting:

“While Ethereum’s competitors will offer similar technical advantages, Ethereum’s strong community will continue to serve as a bigger moat.”

Although the roll-ups are still several months away from being “ready for production”, Messari notes that “a growing ecosystem” has already formed around various roll-up projects, including the development of the protocol by Optimism, Offchain Labs and Matter Labs, and plans for first implementations of Synthetix and Uniswap.

When combined with sharding and proof-of-stake consensus, Messari predicts that roll-ups could allow the Ethereum network to process up to 100,000 transactions per second, an increase in transactional throughput of more than 10,000 times:

“If the rollups are successful, Ethereum should be able to maintain its virtual monopoly on DeFi applications while Eth2 remains in its incubation phase.”