Assets worth millions of dollars are stuck on Ethereum mainnet due to high ETH gas fees.
Hundreds-of-thousands of users don't have enough ETH to cover gas fees for simple transactions.
Blockdesk recently reported that less than 3% of Ethereum addresses hold 0.1 ETH or more, and this is the reason why you see swarm of posts on Twitter and Reddit of people complaining about ETH gas fees being to high.
As one Reddit users puts it; „ETH Fees is what is its Killer“.
For example, someone who has around 50 USD worth of MATIC and 60 USD worth of Fantom on Ethereum mainnet has to pay more than total value of his assets just to bridge them to layer 2 networks.
Yahoo finance reported this year that clusters of addresses with an average price in the range of $144-$170, $212-$262, or $262-$352 are holding a total of 36.24 million ethers.
These people will hardly move their funds to layer 2 networks as the cost of bridging would eat away most of their assets.
For these people swaping and sending their coins and tokens is just not an option.
They are stuck on Ethereum mainnet.
Back in the days crypto fans were wondering will Ethereum beat Bitcoin to mainstream microtransactions, but with gas fees surging over 200% in 2021, crypto developers and ordinary users are flocking to layer two networks. There microtransactions are booming.
As Ethereum is losing favor among developers, new crypto innovations will probably happen on layer two networks.
In its time the Ethereum network has saw the birth of an entire ecosystem of DeFi applications, but now Layer-2-based Dapps are seeing an incredible surge in user activity.
For example, gasless trading is a new feature first implemented on layer two networks, and only now its is slowly coming to Etherium.
Matcha, a crypto trading platform powered by 0x, just enabled Gasless Trading on Etherium mainnet but only for certain token pairs like WETH/USDC, WETH/DAI, WETH/USDT, WBTC/USDC, WBTC/DAI, WBTC/USDT, and with the minimum amount to enable trades ($5,000 USD equivalent or more, with some pairs as low as $1,000) .
This is still not helpful for thousands of users who are stuck on Ethereum mainnet with a bunch of low value tokens.
It's no wonder that Polygon's active addresses surpassed Ethereum briefly in September, or that layer 2 DeFi upstart dYdX recently overtook Coinbase in crypto trading.
Fees also threaten Ethereum's perch as King of NFTs.
Trying to salvage what he can, Ether’s Vitalik Buterin recently proposed a solution to migrate NFTs to the layer 2 ecosystem, that will involve the registration of NFTs in the base and the creation of a wrapper NFT with the ability to “hop” between Ethereum and layer-2 networks. In this way at least Ethereum will not be left behind as many NFT auctions are moving away to layer 2 solutions.
Not only DeFi applications and NFTs, crypto social networks are also moving to layer 2 networks.
As layer two solutions rely on Ethereum as a base layer of security and finality they are actually saving Etherium from being abandoned, as they scale the mainnet network by moving most transactions to sidechains.
This is why cross-chain and cross-layer interoperability is the next frontier in the interconnected decentralized economy.
