Anthony Sassano, a well-known cryptocurrency analyst and Ethereum enthusiast, shared his bullish view on the future of layer 2 solutions on Twitter.
Sassano believes there are several factors that will contribute to an increase in the popularity and innovation of tier 2 altcoins in the coming year.
Layer 2 solutions are protocols that run on top of the Ethereum blockchain and aim to increase its scalability, speed, and efficiency. Examples of Layer 2 solutions are rollups, sidechains, and state channels.
Sassano listed five reasons why he thinks we'll see a "layer 2 summer" in 2024:
- Implementation of EIP4844, a proposal that will reduce gas fees for rollup transactions by allowing them to use less data on the main chain.
- Launch of Base mainnet by Coinbase, a platform that will enable mass adoption of Ethereum by providing a simple and user-friendly interface for accessing decentralized applications (dApps).
- Continuous improvement of rollups such as better user experience, faster withdrawals, more security and more features for both users and developers.
- Emergence of new and innovative dApps such as decentralized finance (DeFi), virtual worlds, real world assets and more on Layer 2 protocols.
- Potential recovery of the cryptocurrency market in 2024 based on his own intuition.
Sassano likened the upcoming layer 2 summer to the DeFi summer of 2020, when decentralized finance applications exploded in popularity and value on Ethereum. He claimed that the foundations for both events were laid during the bear markets of 2018/2019 and 2022/2023, respectively.
To give an example of Tier 2 altcoins, these include MATIC, ARB, OP, STARK and ZkSync, which are not yet released.
*Not investment advice.