Bloomberg cryptocurrency market analyst Jamie Coutts said that many of Ethereum’s competitors may not be able to recover in the next bull market cycle, and the rise of Ethereum L2 is helping to take away revenue from ETH competitors.
He said: “The rise of L2 means that the Ethereum network has begun to take back market share from its Alt-L1 (alternative layer 1) peers. Over the past year, L2 active addresses have grown more than 2x faster than Alt-L1 (albeit from a lower base).”
Coutts said that alternative smart contract platforms face many headwinds that threaten their survival, including inflationary token economics, excessive block space and Ethereum’s rapidly growing network effects, and that most alternative blockchains are likely to fail in the coming years. It was gradually eliminated from the market during the year.