Ethereum Layer 2 scaling solutions may soon hit their limits in efficiently scaling the mainnet, warns Gautham Santhosh, co-founder of Polynomial.fi. Layer 2 solutions are protocols or networks built on top of a layer-1 network to improve its scalability and reduce transaction costs by processing transactions off-chain and then periodically settling the results on the main chain. Since November, the daily tally has averaged a record 21,000, according to pseudonymous data analyst Hildobby's Dune Analytics dashboard. Just two Layer 2s – Coinbase's BASE and World Chain – account for 55% of the daily blog activity.
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