The Chief Product Officer at Coinbase foresees that there will be more advances in layer 1 to layer 2 bridges and rollup technologies.
Coinbase Chief Product Officer Surojit Chatterjee is the latest to publish his predictions for the crypto industry in 2022 and he foresees major advances in the scaling of Ethereum.
Industry leaders, analysts, and investors are sharing their 2022 predictions for the crypto ecosystem, and Coinbase’s Surojit Chatterjee is confident that Ethereum will be at the forefront of Web3 and the crypto-economy as it scales.
The CPO shared his predictions in a company blog post on Jan. 4 in which he stated that Ethereum scalability will improve but alternative layer 1 networks will also see traction.
“I am optimistic about improvements in Eth scalability with the emergence of Eth2 and many L2 rollups.”
He added that newer layer 1 networks focused on gaming and social media will also emerge. Chatterjee predicts that scalability will be vastly improved by advances in layer 1 to layer 2 bridges, adding that the industry will “desperately seek improvements in speed and usability of cross-L1 and L1-L2 bridges.”
These bridges enable tokens to be moved from a layer 1 network such as Ethereum to a layer 2 network such as Arbitrum and vice versa.
Referring to scaling technologies, the CPO specifically mentioned ZK-rollups stating that they will “attract both investor and user attention.” Zero-Knowledge scaling “rolls up” transactions data in batches for more efficient processing on Ethereum's layer 1.
Firms such as Matter Labs have advanced in leaps and bounds in 2021 with the development and deployment of their rollup-based zkSync layer 2 platform.
The layer 2 ecosystem has undergone massive expansion in 2021 with a surge in adoption for all major platforms. According to L2beat, which tracks the L2 ecosystem, the total value locked surged by nearly 11,000% over the past year from around $50 million in January 2021 to $5.5 billion by the end of the year.
Chatterjee predicted that there will be more privacy-focused applications emerging but this could attract more regulatory attention as more KYC/AML (know your customer/anti-money laundering) restrictions are enforced.
“We’ll see new privacy-centric use cases emerge, including privacy-safe applications, and gaming models that have privacy built into the core.”
Other predictions he made include more regulation industry-wide, larger institutional participation in DeFi, the emergence of more DeFi insurance, greater brand involvement in Metaverse and NFTs, and Web2 companies scrambling to get into Web3.