In a one-on-one interview with The Crypto Instances founder Hardik Katariya, Max Rebol, Founding Companion of Harbour Industrial Capital, was blunt about Ethereum’s state of affairs. The VC who invests in Polkadot says that Ethereum’s give attention to Layer 2 has created monetary issues which are making the community much less sustainable.
The Free Rider Downside on Ethereum
Rebol is most crucial of Ethereum due to what he calls the “free rider downside.” He believes that Layer 2 options are utilizing Ethereum’s safety with out giving sufficient again to the community.
Based on Rebol, all these L2s on Ethereum are principally getting a free journey. In easy phrases they use the safety of Ethereum’s crypto financial system, however they don’t pay the charges on the principle chain. It’s not a enterprise mannequin that may final over time.
Attributable to this financial mismatch, Ethereum wants Layer 2 options to turn into extra scalable, but these options take away transactions from the principle community and thus cut back Ethereum’s revenue. Moreover this, Rebol additionally talked concerning the disagreements amongst leaders throughout the Ethereum group.
The skilled investor factors out that the latest bear market noticed his Polkadot-focused fund obtain 3x returns, and now he believes that these financial pressures have led to noticeable disagreements amongst Ethereum’s leaders. Totally different leaders locally usually clashed, and Rebol thinks that situation is nonetheless ongoing. That is the principle cause Ether has confronted so many difficulties these days.
Rebol factors out that Ethereum’s Layer 2 method was principally created as a fast repair fairly than by cautious design. Based on him, Ethereum turned to L2s as a fast answer as a result of the principle chain was overloaded with transactions.
He identified that Ethereum’s method to scaling was doomed from the beginning and has solely brought about extra points than it resolved. Rebol believes that Ethereum’s issues are usually not brought on by short-term market adjustments, however by extra critical points that shall be robust to repair until the community’s financial mannequin is modified.
How is Polkadot Better on this Case?
Rebol spotlighted Polkadot’s edge in blockchain scalability in the course of the dialogue. In a press release later obtained by The Crypto Instances, he clarified that whereas he doesn’t want to criticize competing networks, it’s important to spotlight Polkadot’s progressive construction.
“Polkadot, alternatively, has already solved this very situation because the starting. Parachains are nothing else than an L2 (or rollup), which are design[ed] to pay their fair proportion and are natively interoperable,” he famous. Moreover, Rebol argued that Polkadot’s structure, which permits extra agile block house allocation, presents a “far more sustainable paradigm than Ethereum’s present L1+L2 scaling try.”
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