Vitalik Buterin Highlights the Importance of Layer 2 Technology for DeFi

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Vitalik Buterin, co-founder of Ethereum (ETH) , emphasized through his X account that the costs associated with Layer 2 technology have significantly decreased. He noted that this reduction will be a crucial factor in the widespread adoption of decentralized finance (DeFi). Buterin stated that low transaction fees are the cornerstone of the cryptocurrency market’s success, and although this goal has not been fully realized since it was proposed in 2020, advancements in Layer 2 technology are now making it a reality.

Buterin Cites Taiko as an Example

In his post, Buterin discussed the significance of Layer 2 technology, asserting that DeFi can only truly reach the masses and achieve widespread adoption when transaction fees are sufficiently low. He emphasized that although the cryptocurrency market has made significant strides in recent years, high transaction fees remain a major barrier to further growth. With the emergence of decentralized Layer 2 solutions like Taiko, a fundamental resolution to this issue is anticipated.

Robert Sasu, a core engineer from MultiverseX, responded to this issue, arguing that while the current Layer 2 technology theoretically has the potential to reduce fees, it still relies on centralized architectures to offer low fees in practice. Sasu claimed that this centralization contradicts the principle of decentralization inherent in blockchain and stressed the urgent need for a more decentralized solution.

Buterin disagreed with Sasu, asserting that Taiko, a rollup-based decentralized Layer 2 solution, has successfully achieved low transaction fees, proving the feasibility and affordability of decentralized Layer 2. He highlighted that Taiko’s success not only demonstrates the potential of decentralized Layer 2 but also provides a strong reference for the development of more similar projects in the future.

What is Taiko as Noted by Buterin?

Taiko is a decentralized Layer 2 solution based on rollup technology designed to enhance Ethereum’s scalability and user experience by optimizing transaction processes and reducing transaction fees.

Emerging as a project recently supported by Buterin, Taiko has achieved significant progress in decentralization and economic efficiency, making it a key driver for the further development of DeFi.

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