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132 - Polynya's Crypto Thesis

Bankless

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Value Dynamics in Ethereum's Layer 2 Solutions

This chapter investigates the interactions and value capture between Ethereum's primary layer and its various layer two solutions, particularly within decentralized finance (DeFi). It highlights ongoing developments such as EIP 4844 and dank sharding that could reshape costs and value dynamics, while also addressing the complex scalability challenges of blockchain networks. The chapter further emphasizes the symbiotic relationship between Layer 1 and Layer 2, despite concerns about economic dominance and operational inequalities in the crypto space.

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