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Layer-1 blockchains: How crypto winter could slow the challenge to Ethereum

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Given Ethereum’s dominance coupled with the current crypto bear market, it remains questionable if L1s will flourish. This was recently highlighted in a Chainalsys blog post entitled “New layer 1 blockchains are expanding the DeFi ecosystem, but no ETH killers yet.” Ethan McMahon, an economist at Chainalysis, told Cointelegraph that Chainalysis published this report to raise awareness for the current L1 ecosystem:While Ethereum allowed decentralized finance (DeFi) to flourish in 2020, a number of layer-1 blockchains (L1s) have since been developed to address the challenges associated with the network.

For instance, as Ethereum’s proof-of-work (PoW) consensus mechanism and high gas fees continue to impact transaction speed and scalability within its ecosystem, L1s like Algorand, BNB Chain, Avalanche and others aim to solve these problems.In order to demonstrate this, McMahon explained that Chainalysis gathered data from different blockchains to determine the strengths and weaknesses of the networks.

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