Crypto industry news:
Ethereum founder Vitalik Buterin shared his views on Layer 3 protocols. While Layer 2 protocols focus on „mitigation”, the following protocols would serve different purposes.
Other Changes in Ethereum
While Layer 2 solutions based on Ethereum focus on scaling networks, Buterin believes that their Layer 3 counterparts serve a completely different purpose – providing a „proprietary function”. He shared his thoughts in a September 17th post where he outlined three „visions” for what Layer 3 solutions will be used for in the future.
The founder of Ethereum said that the third layer of the blockchain only makes sense if it offers different functions than the second layer.
„A three-tier scale architecture that aims to stack the same scale model on top of each other usually doesn’t work well,” he said. Except that „a three-tier architecture, where the second and third tiers have different goals, can work,” he added. One use case for Layer 3 would be what Buterin describes as „personal functional,” referring to privacy-oriented applications.
Another use case would be „custom scaling” for specialized applications that don’t want to use the Ethereum Virtual Machine (EVM) to do calculations. Buterin also added that layer 3 can be used to scale with Validiums tool. This could be useful for enterprise blockchain applications using „a centralized server that regularly performs validation checks and chain shortcuts.” But Buterin also pointed out that because cross-chain transactions can be easily and cheaply made between two Layer 2s, building a Layer 3 doesn’t necessarily improve network performance.
Technical Market Overview:
The ETH/USD pair broke from last month’s low seen at $1
23 and made a new weekly low of $1281 before a low rebound. The $1358, $1
07 and $12 levels are now technical resistance for the bulls as the market tries to extend the H
timeframe from extremely oversold conditions. The next downside is $1281, $1267, $1255 and below. Despite the heavily oversold market conditions during the H
timeframe, momentum remains weak and negative, which may indicate that ETH is still in a short-term downtrend.
The Ethereum market has been moving lower and lower since a swing was made at the $2029 level in mid-August. Key technical support for the bulls is $1,281.9. If the decline continues, the next target for the bears is the $1,000 level.