Dencun has upgraded to further reduce Ethereum’s dominance and accelerate layer 2 solutions, Flipside says.
Since most smart contracts are no longer deployed on Ethereum, analysts expect the Dencun upgrade to further strengthen this trend as layer 2 solutions improve.
Ethereum is fast losing its position as the premier hub for smart contract deployment amid increasing competition among layer 2 networks (l2), analysts at Flipside said in a recent research report. According to the data, approximately 640 million smart contracts have been deployed since January 2022, with Polygon and BNB Chain (formerly Binance Smart Chain) leading the way in contract deployment.
Flipside also said that Optimism, a layer 2 solution that operates on top of the Ethereum architecture, “accounted for two-thirds of all EVM smart contract deployments so far in 2024.”
“As the majority of EVM contracts are no longer deployed directly on Ethereum, we expect this trend to accelerate further as L2 solutions become more accessible and efficient with the upcoming Dencun upgrade.”
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Analysts noted that contract distributors have also surged, accounting for 34.7% of classifiable distributors across chains observed since January 1, up from 11.2% in both 2022 and 2023. But Flipside points out that “it’s not just developers.” You can distribute contracts.” He added that smart contracts can also distribute contracts.
“For example, ‘factories’ like UniswapV2Factory allow anyone to create liquidity pools for their own tokens without permission. Because of this, deployments tend to be consolidated around distributors like these.”
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Meanwhile, distributors involved in non-fungible tokens (NFTs) fell from 18.6% to 8.2% over the same period, analysts said. .”
In January, Michael Novogratz’s cryptocurrency bank Galaxy Digital said in a research report that 2024 would be a critical year for Ethereum and that other layer-one blockchains like Solana It was revealed that there is a high possibility of raising the stake.
Galaxy Digital analysts point out that Ethereum’s modular architecture, especially its different rollup types, will bring new challenges and technical risks due to its early stage of development. They single out Solana as the most unique general-purpose blockchain that embraces a monolithic architecture, positioning it as a major competitor to Ethereum.