If you are interested in the future of decentralized applications, you might have heard of Ethereum and Solana. These are two of the most popular and innovative PoS blockchains, which use a different consensus mechanism than the traditional PoW blockchains like Bitcoin.
PoS stands for Proof-of-Stake, which means that the validators of the network stake their own tokens to secure the blockchain and process transactions.
Unlike PoW, which requires a lot of computational power and energy to solve complex puzzles, PoS relies on the economic incentives of the validators to act honestly and avoid malicious behavior. If a validator tries to cheat or attack the network, they will lose their stake and be penalized.
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Ethereum is the native token of Ethereum, the second largest blockchain by market cap and the most widely used platform for smart contracts and dApps. Ethereum is currently transitioning from PoW to PoS, with the launch of the Beacon Chain in December 2020.
The Beacon Chain is a parallel blockchain that runs alongside the main Ethereum chain and implements the PoS consensus. The final goal is to merge the two chains and make Ethereum fully PoS by late 2022 or early 2023.
In 2023, Ethereum witnessed the successful implementation of the Shanghai upgrade, a pivotal moment that significantly bolstered the network’s infrastructure. Despite the absence of a singular, monumental event, Ethereum experienced steady growth throughout the year. The consistency in Ethereum’s development, particularly its transition to PoS and ongoing advancements in layer 2 solutions, laid a solid foundation for its future dominance.
Developers in the crypto and Web 3 market focused on building during 2023, and Ethereum was no exception. Many projects initiated in preceding years came to fruition, contributing to the network’s robust tech stack. While time-consuming in development, these technological improvements position Ethereum for enhanced performance in 2024.
JPMorgan analysts share a similar outlook, predicting that Ethereum will outperform Bitcoin in 2024. Here are the key drivers behind their assessment:
EIP-4844 Upgrade (Protodanksharding): Scheduled for the first half of 2024, this upgrade aims to reduce transaction costs and enhance transaction speeds on the Ethereum network. By improving network activity, it is expected to boost Ethereum’s performance.
Dominance in Transaction Activity: Despite competition from networks like Solana and Cardano, Ethereum remains dominant in transaction activity.
Solana is a newer blockchain that was launched in March 2020 and claims to be the fastest, cheapest, and most scalable PoS blockchain in the world. Solana uses a novel consensus algorithm called Proof-of-History (PoH), which creates a cryptographic timestamp for each transaction and allows the validators to process them in parallel without relying on a leader. Solana can achieve over 50,000 transactions per second (TPS) and sub-second finality, with fees as low as $0.00001 per transaction.
Both Ether and Solana have their own strengths and weaknesses when it comes to PoS. Ether has a larger and more diverse ecosystem of developers, users, and applications, as well as a higher level of security and decentralization.
However, Ether also faces challenges such as scalability, congestion, high fees, and complexity of the transition to PoS. Solana has a faster and cheaper network, as well as a growing community and innovation. However, Solana also has drawbacks such as lower adoption, less compatibility with other blockchains, and potential trade-offs between speed and security.
Optimism $86M private sale and SEI moving to Ethereum Virtual Machine
Meanwhile, Optimism, a leading layer 2 scaling solution for Ethereum, has announced that it has sold $89 million worth of its native token, OP, in a private transaction. The sale was led by Paradigm, a crypto-focused investment firm, and included participation from other prominent investors such as Coinbase Ventures, Alameda Research, and Pantera Capital.
The OP token is designed to secure the Optimism network, which uses optimistic rollups to enable fast and cheap transactions on Ethereum. Optimistic rollups are a form of layer 2 scaling that bundle multiple transactions into a single proof that is verified on the main chain. This reduces the congestion and fees on the Ethereum network, while preserving its security and decentralization.
Optimism claims that its solution can increase the throughput of Ethereum by up to 100x, while maintaining full compatibility with existing smart contracts and developer tools. Optimism has already launched its mainnet beta, which is currently being used by several popular applications such as Uniswap, Synthetix, and Chainlink.
The OP token sale is a milestone for Optimism, as it demonstrates the strong demand and support for its technology from the crypto community. The funds raised will be used to further develop and improve the Optimism network, as well as to foster its adoption and growth. Optimism plans to launch its public mainnet in the second quarter of 2024, which will allow anyone to use its scaling solution without any restrictions.
Optimism’s co-founder and CEO, Jinglan Wang, expressed her excitement and gratitude for the successful token sale. She said:
“We are thrilled to have such a stellar group of investors backing us in our mission to scale Ethereum. We believe that optimistic rollups are the best way to unleash the full potential of Ethereum, and we are working hard to make them accessible and easy to use for everyone. We are grateful for the trust and support of our community, and we look forward to delivering on our vision of a scalable and decentralized web.”
SEI TRANSITION TO EVM
SEI, the leading platform for decentralized finance, is transitioning to the Ethereum Virtual Machine (EVM) compatible blockchain. This will enable SEI to leverage the benefits of interoperability, scalability, security, and innovation that the EVM ecosystem offers.
SEI is a crypto project that aims to democratize access to financial services and products for everyone, regardless of their location, income, or identity. SEI enables users to create and manage their own decentralized financial instruments, such as lending, borrowing, trading, investing, and saving. SEI also provides a marketplace for users to discover and interact with other decentralized applications (DApps) built on SEI or other EVM-compatible blockchains.
The transition to the EVM will allow SEI to tap into the network effects and synergies of the largest and most vibrant blockchain community in the world. SEI will be able to integrate with existing EVM DApps and protocols, such as Uniswap, Aave, Compound, MakerDAO, Chainlink, and many more.
SEI will also be able to benefit from the innovations and improvements that are constantly being developed on the EVM, such as layer 2 solutions, sharding, proof-of-stake, and zero-knowledge proofs.
- The transition process will be gradual and smooth for our users and developers. We will provide detailed guides and tutorials on how to migrate your SEI tokens, assets, and DApps to the new EVM-compatible blockchain. We will also ensure that there is minimal disruption or downtime during the transition period -SEI.