What does Coinbase wrapped staked ETH mean?

Build a token bridge Coinbase assesses the competition and the way forward for leading smart contract platform Ethereum (ETH), which has had a bumpy start to 2022.

In a detailed report , Coinbase head of institutional research David Duong says that Ethereum is at a critical juncture both with regards to its own attempts to implement ETH 2.0 and facing pressure from other blockchain projects.

“As scalability challenges for Ethereum continue to grow, we believe traction for L1 [layer-1] alternatives will depend primarily on how quickly we see ETH 2.0 and L2 [layer-2] solutions emerge.

That is, we could probably see the continued growth of alternative L1 networks in [the first half of] 2022, as well as bridges to connect these chains. However, the window of opportunity for L1 alternatives may start to narrow considerably in [the second half of] 2022, as we expect ZK testing technology to improve and rollups to gain more widespread use.” .

The report highlights how the high cost of using the Ethereum protocol has negatively impacted its widespread growth, but also mentions that a considerable amount of development is still done using ETH.

Ethereum Competition in 2022: Solana, Avalanche, Terra

This is one reason layer 1 alternatives like Solana (SOL), Avalanche (AVAX), and Terra (LUNA) attracted significant attention in 2021.

However, the majority of active application development on L1 networks still appears to be happening on the Ethereum blockchain with a total value locked of $156 billion across 214 projects.”

Ethereum’s competitors Solana,

Cross chain bridge development

Avalanche and Terra all saw significant growth last year, but have not remained immune to the general downturn that has hit the crypto market in 2022.

Ethereum ushered in the new year with a value of $3,730, but has seen a number of price drops. At the time of writing the news, the price of ETH is $2621.

Coinbase’ s analysis concludes by saying that Ethereum’s transition to proof-of-stake (PoS) will likely result in miners issuing and selling less ETH. However, this will not have any impact on the functionality of the blockchain. The report does not see any definitive winner for this year.

As the scalability of ETH improves, users may refrain from seeking faster and cheaper alternatives to Ethereum, for example.