Ethereum has so far earned itself a solid reputation as one of the most attractive blockchains and it has so far played an important role in facilitating the decentralized internet. However, Ethereum’s best days might still be ahead courtesy of some of its ongoing developments.
The second half of 2021 is critical for the Ethereum blockchain because of the many developments scheduled to take place. For example, it is already in the process of transitioning to Ethereum 2.0, which is expected to become even more attractive to projects looking to enter the decentralized world. Reddit is among the first projects to leverage the Ethereum blockchain during the transition period through its layer 2 scaling solution known as Arbitrum.
Arbitrum is the recently launched layer 2 scaling solution for Reddit’s community points system built on the Ethereum blockchain. It is designed to incentivize high-quality conversations on subreddits. The integration with Ethereum will allow it to introduce a reward program through which users will receive ERC20 tokens when they contribute quality content within the community.
The testing phase for Arbitrum kicked off in May. Its layer 2 approach is also designed to facilitate cheaper transaction fees considering the expensive nature of the Ethereum blockchain. It leverages optimistic rollups to combine multiple transactions into one. This approach allows it to save on fees and increase transaction speeds.
Arbitrum’s layer 2 mainnet is expected to go live sometime soon, perhaps in August after the EIP 1559 upgrade which will be deployed on August 4. The timing for Arbitrum is likely not a coincident but the result of plans to take advantage of a smoother transition once the EIP1559 upgrade goes live.
Reddit’s current goal is to use the Ethereum blockchain to leverage the power of tokenization. The introduction of rewards is a strategic move aimed at making Reddit more attractive while also incentivizing participants to promote high-quality conversations. If comments receive rewards, then users who are actively engaged in meaningful conversations stand to gain some ERC20 tokens as rewards. Those tokens will also be redeemable, and this approach might be the catalyst that Reddit needs to achieve its full potential.
The benefit for the Ethereum network is that Reddit, one of the most popular social platforms will add value in terms of network usage. It is just one of the new additions to the Ethereum blockchain and there are many more to come, highlighting how the network is rapidly growing and gaining value. It will provide more growth for ETH since its blockchain is the base protocol layer supporting all those projects.
Source: CoinMarketCap
ETH’s value is expected to keep growing as more projects join the Ethereum network. The network demand will generate even more value in the form of network fees, which will in turn fuel the demand and growth for ETH. The cryptocurrency’s performance in the last six days has been quite interesting thanks to the massive bull run that has prevailed over the last few days. It jumped from its three-week low of $1,706 on Tuesday last week and peaked at $2,433 at the height of the recent rally.
The Ethereum foundation expects to complete the transition to Ethereum 2.0 by the end of the year according to a recent announcement on Ethereum’s Github space, allowing it to kick into high gear. The current price level might likely be the lowest that ETH will ever be considering the immense value that the blockchain stands to gain in the future.
Sydney has 20+ years commercial experience and has spent the last 10 years working in the online marketing arena and was the CMO for a large FX brokerage.
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