- Zeng Jiajun, a core contributor to Soul Wallet, said that the crypto market is in its early phase.
- Vitalik Buterin believes that more money will pour into the crypto wallet with affordable L2 solutions.
- Buterin said that cheap transaction fees are a necessity for crypto to mature.
Ethereum co-founder Vitalik Buterin sees the future for decentralized finance (DeFi) to remain strong should the transaction fees go down. Buterin believes that affordable Layer 2 (L2) solutions are the key to help widespread DeFi adoption, attracting more capital, and even drawing in traditional financial institutions.
This insight came as part of a larger conversation sparked by Zeng Jiajun, a core contributor to Soul Wallet. Jiajun pointed out that the crypto market is still in its early stages. He pointed out Bitcoin (BTC), the world’s largest digital asset by market capitalization, towering over the rest with a dominance of over 50%. Its $1 trillion valuation dwarfs the combined value of the entire altcoins, despite the sheer number of projects with immense potential.
Jiajun acknowledged that while half of Wall Street owns Bitcoin, there’s massive potential for adoption of other digital assets. He emphasized that significant milestones in the blockchain industry, such as the Ethereum Merge and the launch of L2 solutions like Arbitrum, zkVM, and zkEVM, have occurred only within the last few years, adding:
“BTC dominance > 50% is precisely the reason why we’re early. ‘Crypto’ is ‘blockchain’ more than ‘currency.’”
Affordable L2s to Drive Growth
Jiajun further noted that while $20 billion has flowed into the digital asset space in the past four years, it pales compared to the over $200 billion invested in artificial intelligence during the same period.
Buterin responded, suggesting the situation could change with the advent of affordable L2 solutions. The Ethereum co-founder stated that he’s been advocating since 2020 that DeFi’s potential beyond high-value transactions hinges on low transaction fees.
Read also: Ethereum Vitalik Buterin’s Vision for User-Friendly Crypto Transactions Gains Momentum
Buterin added that it has been only since March that many L2 solutions have debuted with lower fees, potentially implying that more money will be poured into these networks as the market matures in the long term.
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