Layer one blockchains have become a widespread phenomenon in the crypto space. One of the arguments made by the supporters of these new projects is that they will replace the Ethereum blockchain. However, despite these blockchains recording some level of success, none of them has come close to surpassing Ethereum.
Blockchain.com founder questions Ethereum killers
The co-founder and CEO of Blockchain.com, Peter Smith, has said that none of the Ethereum killers has come close to taking Ethereum’s position. Some of the top layer one blockchains include Solana, Avalanche, and the Near Protocol. Some of the newly launched ones are Aptos and Sui.
The developer of Sui, the latest Layer 1 blockchain to enter the market, is currently in talks to secure multi-million dollar funding from investors. On the other hand, the team behind Apsos has already secured $350 million through two funding rounds this year.
Despite the growth of these layer one blockchains, the Ethereum blockchain remains alive. Ethereum is popularly known as the king of decentralized finance (DeFi), as it remains the preferred network for some of the best crypto apps. The network is also in the final stages of moving from a proof-of-work (PoW) network to a proof-of-stake (PoS).
Despite the competition Ethereum is facing, the network has remained the preferred hub of top DeFi projects. However, layer ones attract investors’ money because they have proved their profitability.
An influx of investments in layer one networks
In an interview with The Block, Smith said early investors in layer one networks had generated solid investment returns. However, this has created the question of whether these platforms will significantly impact the blockchain space and be the future of finance, or they are just being used as an avenue to make more money.
There are also notable differences between venture capital investing in other industries than the crypto space. In crypto, venture capitalists have backed projects working in the same niche. For instance, some leading venture capital companies such as Andreessen Horowitz, Multicoin Capital, and Jump Crypto have all backed projects working towards replacing Ethereum, including Aptos and Solana.
However, Smith noted that there was a rationale behind funding going towards blockchain projects doing the same thing. He noted that layer one blockchains had shown their capability to deliver strong returns within a short time. Investors fund these projects despite their inability to succeed in replacing Ethereum.
Moreover, the current pattern shows that investors are cashing out of later one bets that have since been successful. They are now signing in to new layer one projects such as those using Facebook-related programming languages.
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