ZK

MinimalGravitas

Terms have meanings, and you finding a dodgy website claiming otherwise doesn't change that... An L2 settles transactions to its corresponding L1. ZK and Optimistic Rollups, Validiums and State Channels are all types of L2. Harmony didn't settle to Ethereum, so it wasn't an L2.

Smobert1

I would say this was always the plan re your modular comment. I did watch back a number of charles older videos and he has been talking about it and building for it for a long time, I think most people just didnt get it when he said it initially. Re the why now, It was just getting POS staking correct and designing a secure programming language for eUTXO was difficult, and that was what was being built for a long timem definately felt like it wasnt getting done a time, the peer review approach is slow. as for scaling, thats fine but ZK roll ups work really well on the dapp level, instead of a 1000 transactions on chain, we can have one from the dapp. This being while the dapp is still in its growth stage that it doesnt need to create its own side chain or L2 as it grows to a sufficient size. Which is probably the end state of any dapp of sufficient size, some multichain giant, but thats far into the future and more of a fever dream as it stands. as for the first comment must be chained. Its more can be chained. There is no global state, like Bitcoin each UTXO is like its own bit of cash that can be spent independantly of the rest. I would say flash loans would be difficult on ada, while it use AMM dexes. aka batchers just cant see it working. While we move forward models like AXO will become more dominent on cardano. Look into the dex, programable swaps its really a great dapp. But if we imagine two order book dexes, i can see some more programable arbitrage flash loans style interactions becoming more straightforward. As i said you can send the ada and receive your token in the same tx with a limit order swap, non custodial until it activates. But i dont think we will have flash loans as you see them on eth, like we have learned we cant just copy eth style AMM dexes. But flash loans while great for arbitrage, it also leads to flash loans attacks and exploits.

Smobert1

as are things with eUTXO to global state. Cant speak on the EVM style flash loans havent looked deep into that issue. world will have a lot of chains thats a given. ETH and evm has a lot of devs like yourself, I view L1's as nation states, questions become how does it government run etc etc. Im spectical of ETH's approach of all scaling seeming to be on the L2, but it can obviously work im just not convinced. Some advantages with eUTXO vs EVM, you can have non custodial limit orders in place. aka its a smart contract that executes when your bid price is hit, with axo this is as an nft in your wallet which you can cancel at any point by burning the nft essentially. you can do this with leverage trading. but the underlying assets never leave your wallet until the contract executes. I dont see why a flash loan couldnt exist. But what works on EVM and global state isnt always the best fit for eUTXO. they are just different, as i said creating capital efficient order books is something that isnt really possible on eth. hence why the AMM model was created, which really isnt great when using eUTXO, batchers needed to be used and this os all we saw on cardano initially. things need to be done differently and that stuff takes time. Another talking point While everyone says transactions within transations arent TPS, i think its more horizontal scaling vs vertical. Buses vs taxis for the city, on the dapp level massive scaling advantages. The biggest thing will be with ZK roll ups. most of the issues on that side for eth are trying to make sure there is a state were you know your inputs and outputs exactly before the transactions are submitted on chain, so you can just submit the proof. But with cardano, this is baked into the code in that all transactions are deterministic, you by default know the inputs and outputs and you know it will eventually be submitted on chain ( even in the case of heavy chain use, it would just take time ), so coding for this becomes much easier.

Notorious544d

Using UTXO forces convoluted workarounds like this just so the Blockchain can hold additional variables. This is worse than Ethereum's Account based model + L2 ZK rollups so why would anyone use it?

Astramie

Loopring is an L2 though. It's pretty cool to see scalability solutions still being implemented on an L1 like Cardano. They even have support for ZK primitives coming in the coming Chang upgrade.

coinfeeds-bot

tldr; HashKey Group, a leading digital asset financial services group in Asia, announced the launch of HashKey Chain, an Ethereum layer 2 network. This new network aims to provide low-cost, efficient, and developer-friendly solutions using ZK-proof technology. HashKey Chain, which has been in development since 2018, will utilize the HSK token to reward ecosystem contributors. It's designed to support a wide range of on-chain services, aiming to attract more users and assets to the Web3 space. The network is preparing for a testnet launch in the next six months, with a mainnet rollout expected within a year. HashKey Chain will also form an Ecosystem Alliance to foster a collaborative L2 community, emphasizing security with rigorous protocols. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.

MinerFortyNine

/r/SpaceMesh will be around, issuance model is over 1893.7 years. Lane Rettig (former ETH VM Core Developer for its VM) is the SpaceMesh VM Core Developer. Not much is known yet on SpaceMesh's VM, but what is known is it has been christened the name Athena. Athena will be based on RiscZero which is a ZK or zero knowledge virtual machine. SpaceMesh is a layer one, smart contract platform, public blockchain where people provide a decentralized hardware solution. SpaceMesh is also designed to be efficient, and rewards everyone who participates in the chain, so unlike most of the market if you have hardware, set it up properly, and let it run, then you will get rewards based upon your contribution to the network.

vaudeviIIeviIIain

It had a pretty decent shot last cycle. Why isn’t anyone pumping it now? Because there’s a stack of better tech now - ZK, whatever Aztec becomes, even railgun

Tarrant64

This is where a bit of KYC and ZK (zero knowledge) can come into play. Atala Prism (built on Cardano) has identity services that work to solve this specific purpose through SSI (self sovereign identities). [https://atalaprism.io/](https://atalaprism.io/). There's also a sidechain/partner network being built, Midnight, that will focus on data privacy/protection focusing on ZK as well. I think it's apt to say ZK in general for crypto has scaling benefits and privacy benefits. Both would be needed in any kind of voting system.

ErmenegisSarchiavizz

is that a kind of ZK-snarks ?

BasisOk4268

Yeah, I’ve been providing liquidity on Zerolend for the upcoming/expected ZK airdrop. Have also started staking on Ethena for that airdrop!

BasisOk4268

I’ve been using Zero Lend on the ZK-Sync network, building points towards the airdrop. Also got a small position (~$100) in the ETHENA staking, to once again build points towards the airdrop.

Mr_Blondo

It has top 5 daily active users of smart contract platforms right now. It is absolutely one of the most innovative if not the most innovative technologies. It has the most efficient virtual machine out of any smart contract platform by far (>10x the throughput of solana alone specifically). Its consensus is so innovative in fact that Vitalik Buterin often acknowledges Algorands innovativeness and they even intend to use randomness in their validator selection in the future. Solana envisions a similar system where they shuffle the validator set a few times a day. Algorand shuffles the validator set three times every block. That is what makes its consensus mechanism so special hence the name ALGOrithmic RANDomness. Combine this consensus mechanism with the most efficient virtual machine and instant finality. Now they’ve made it so native python is the default coding language…not pseudo python. This is native python. The most capable blockchain is now coupled with one of the most popular coding languages. It’s already one of the most developed and most used blockchains. It is one of two blockchains that are quantum secure because of state proofs. These state proofs will also make it possible for cross chain interoperability (i.e. trustless bridges with no custodian). The founder invented zero knowledge proofs, and they will be added to layer 1 to enable ZK operations like on-chain identity as well as anonymous transactions like monero and zCash. I could go on for those of you that are actually curious. I have no delusions about the price action. The price action was bad since the last bull run, but this was largely due to hyperinflationary vesting to the early investors. Now Algorand is one of the least inflationary tokens with less than 3% per year. Algorands only problem is awareness. Welcome

cannedshrimp

Maybe someday we can bring in ZK roll ups and at least move all the bullshit to a less expensive L2

BillingSteve

It's a lot to get into over text, but to start, I'd say look into these terms: DAOs - decentralized autonomous organizations. Any tokenomics that include burndrops, burning is decreasing the supply, and a burndrop is redistributing some of the burn to the community. ZK proofs (zero knowledge). If you are genuinely curious, I'm happy to have a longer conversation.

hamta_ball

Lightening, Liquid, Federations, ZK roll ups...

coinfeeds-bot

tldr; Michael Kong announced the development of Sonic, a new blockchain technology by the Fantom team, designed to significantly improve upon the Opera network's capabilities. Sonic boasts a processing speed of 2,000 transactions per second (TPS) with sub-second finality, a substantial upgrade from Opera's 200 TPS. It aims to serve as a shared sequencer for L1 and L2 chains, capable of handling over 180 million daily transactions. The launch is anticipated in late summer or early fall, with plans to introduce a governance proposal for bridging and security, simplified staking, liquid staking support, grant programs, and a rewards campaign. Future updates include enabling supersets, parallel FVM, ZK execution scaling, and the introduction of a canonical stablecoin. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.

Burbank309

Sure is, and deserves praise for being one of the first ZK systems on the chain. But last time I checked it was not a general purpose L2. I also remember it being very expensive to enter and exit. Is it still like that?

Omnomnomnivor3

grateful for the Polyhedra pandas for getting my wallets more than a thousand $ZK now I'm gonna go on a Panda shopping spree just cause they're adorable and for sure will have more uses cases!

Omnomnomnivor3

Had to create an OKX wallet just for the idea of selling Polyhedra ZK, no way in hell I'm gonna be swapping in L1

virtual_black_whale

You get a government issued souldbound token (NFT) per person and your vote is recorded on-chain via ZK so everything remains pseudonymous but verifiable.

virtual_black_whale

You're exaggerating your points a bit but you're right, doing DeFi on Ethereum is expensive. What you can do is bridge and hold if you have a few hundreds and that wont cost you more than traditional investment product. It's important to remember that this is still young tech, things will get better and ZK will allow L2 to be much more trustworthy while still being affordable. Again, if people use Ethereum or Bitcoin it's not because they love paying fees. Imagine it like other real life product you're willing to pay more for, like x food or x item, would you appreciate it becoming shit just for it to be cheap ?

JeremyLinForever

Umm.. either you’re ignorant or you are just trying to hammer a round peg in a square hole lol. The criteria are as follows: 1. Monetary investment involved in transaction - ETHs inception was selling premined ETH to people. There was money involved in purchasing ETH, even though it was for 5 cents per ETH. In contrast, Bitcoin had to be mined and there was no monetary investment, people just mined to further the network or mined it for shits and giggles until value was derived from what effort it took people to mine it. 2. Expectation of profits - if people are buying ETH at 5 cents a coin at inception, then there’s a reasonable expectation of profit that they would be later to sell at a higher price. Nobody who mined Bitcoin knew where the price was going to go. Again, they did it for fun or shits and giggles since the inception. 3. Common enterprise - Vitalik Buterin. He literally coded base layer of ETH, and he did it with the expectation that he could change code whenever he wanted. You know why? Because he wanted to change code for Bitcoin and the Bitcoin core developers disagreed. He got butt hurt and decided to do his own thing. Enter ETH. 4. Success relies on the efforts of others - see above. In base layer early stage ETH, Vitalik created ETH by himself and to this day, he has coders to consistently try new flavors of the month. ZK rollups, wrapped BTC, any dog shit plan to make ETH more valuable. In contrast, Bitcoin only has core developers who have been lately on a standstill because they couldn’t reach consensus on changing code. If it smells like a duck and quacks like a duck… you should probably try and get your head out of the sand buddy.

A_Dancing_Coder

You forgot to mention that Polygon POS will be converted to a real L2 using their new type 1 prover. So it won't stay a side chain. The type 1 prover allows every EVM Chain to become ZK and connect to the entire Polygon ecosystem via an aggregation layer, which will unify fragmented liquidity across Polygon.

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Ethereum has drastically changed in the past year now that it has rebranded itself as **Consensus/Settlement layer** for other Layer 2 Execution/Rollup networks. It is no longer trying to be a monolithic blockchain by itself. Because of this shift in design, many of its former CONs are no longer major issues. And many of the CONs that still exist often have a beneficial sides. > > I discuss the CONs of Ethereum and their impact on its users here: > > ## CONs > > **Gas Fees** (major): > > The biggest complaint for Ethereum is its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason much of DeFi is extremely expensive. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Basically: use a coin on a different network to avoid fees. > > Typical transaction fees for Ethereum were [between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $50+ several times in 2021. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees mid-year in 2021 saw $100-$200 gas fees. Transferring ERC-20 tokens (often $20-50) is also more gas expensive because it can't be done through native transfers like on the Cardano network. It's impractical to use swaps like Uniswap for small transactions due to these fees. > > In particular, One/Many-to-many batch transactions are extremely gas-expensive using Ethereum's account-based model compared to Bitcoin's and Cardano's UXTO-based model. [This batch transaction on Ethereum](https://etherscan.io/tx/0x0fe2542079644e107cbf13690eb9c2c65963ccb79089ff96bfaf8dced2331c92) cost over $5000 while [a similar eUXTO transaction on Cardano](https://adapools.org/transactions/e586c6340ee9e60a6c64f447feffe5f89bdabc7741666ecaa681081957938f56) only cost $0.50 in fees. > > On the other hand, these fees provide Ethereum long-term economic sustainability and resilience against DDoS and spam attacks. > > **Competition from other Smart Contract networks** (moderate): > > Ethereum has enjoyed its lead as the smart contract blockchain due to first-mover advantage. But there are now many efficient smart contract competitors like Algorand, Solana, and Cardano. Ethereum is now facing much competition. Who wants to pay $20 gas fees on Ethereum when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? > > Fortunately, the amount of competition is limited because Ethereum is positioning itself as a Settlement layer whereas these other networks are monolithic networks. All monolithic networks will eventually run into scaling issues due to long-term storage and bandwidth limits. It will really depend on how successful Ethereum's Layer 2 rollup solutions will be. > > **Future uncertainty about Layer 2 solutions** (major): > > Ethereum's long-term success is dependent on the success of its Layer 2 solutions. > > These Layer 2 solutions are still extremely early. Even after a year, L2 has a very fragmented adoption. The majority of centralized exchanges currently do not support Layer 2 rollup networks. A few have started to support Polygon, which is more of a Layer 2 side-chain that saves state every 256 blocks than a Layer 2 rollup. Very few CEXs allow for direct fiat on/off-ramping on L2 networks, which puts those networks out of reach of most users. > > Many of these Layer 2 networks (Arbitrum, Optimism, Loopring, ZKSync, etc), are not interoperable with each other. You can store your tokens on any specific L2 network, but they're stuck there. If you want to move your tokens back to Layer 1 or to another L2 network, you have to pay very expensive smart contract gas fees ($50-300). Eventually, there will be bridges between these networks, but we could be years away from widespread adoption. > > Fragmented liquidity is another huge issue. Each of these L2 networks has its own liquidity pool for each token it supports. You can store your token on the the L2 network, but you won't be able to trade or swap much if there are no liquidity pools for that token. Eventually, there will be Dynamic Automated Market Makers (dAMMs) that can share liquidity between networks, but they are complex and introduce their own weaknesses. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. They are very centralized in how they operate, so there's always the risk that their network operators could cheat their customers. By now, the community seems to agree that ZK rollups are the future rollup solution to decentralized L2 networks. There is only 1 notable instance of Plasma (Ethereum to Polygon network conversion), and no one uses it anymore since the Ethereum-Polygon bridge is easier to use. The biggest competitor to ZK rollups are Optimistic rollups, and those take too long to settle back to Layer 1 (1 week) and are still too expensive to use (20-50% of the cost of L1 Ethereum gas fees for transfers). > > **ZK Rollups** require special infrastructure to generate ZK Proofs. These are very computationally-expensive, potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly. To reduce the cost, they are done completely-centralized by specialized servers. Thus the cost of a ZK Rollup is cheap at about [$0.10 to $.30](https://l2fees.info/). But even at $0.10 per transfer and $0.50 per swap, these are still at least 10x more expensive than costs on Algorand and Solana. Users will have to decide whether the extra cost and hassle of using an L2 platform is worth the extra security of settling on the more-decentralized and secure Ethereum L1 network. > > **Ethereum Proof-of-Stake merge is arriving later than competitors** (moderate): > > The ETH PoS Beacon chain has been released, it's a completely separate blockchain from ETH and won't merge with the main blockchain [until later this year](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving its competitors plenty of time to provide FUD. We still don't know how successful the merge will be. Currently, stakes are locked, preventing investors from selling. We don't know what will happen to the price once staking unlocks. > > **MEV and Dark Forest attacks** (minor): > > [MEV](https://np.reddit.com/r/MPlankton/comments/rs4wp2/the_dark_forest_of_cryptocurrency/) is actually a pretty big issue for networks with high gas arbitrage and mempools like Ethereum, but most casual users will never notice hostile arbitrage. When you broadcast your transaction to the network, there are armies of bots and automated miners that analyze your transaction to see if they can perform arbitrage strategies on your transaction such as front-running, sandwiching, excluding transactions, stealing/replaying transactions, and other pure-profit plays. "Dark Forest" attacks have reveled that bots are constantly monitoring the network, and they can front-run you unless you have your own private army of miners. > > **Final Word** > > Overall, I still think the PROs outweigh the CONs for Ethereum in the long-run due to its first-mover advantage and the long-term sustainability of the Ethereum network. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2luf/top_10_ethereum_conarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/uvunu3/britains_crypto_list_heres_who_to_watch/).

generateAnyUsername

You could but ETH is really well proven and ZK rollups on layer 2 really give you all the security of ETH at a lower cost. Side chains like Polygon aren't as secure as ETH and BNB is far more centralised than ETH. I can't believe I'm even trying to explain why ETH is good, it speaks for itself.

antiwrappingpaper

Neither roll-up centric model on the execution layer nor dank-sharding invalidate my above statements. (If you see something that I'm missing, please let me know) Dank sharding will unify the transactions between the consesus layer and the execution layer, in order to not create delay between the sharding data (and possible duplication). The design of the shards in relation to the consesus is not changed. Roll-up centric model has nothing to do with what I said above, besides that it'll improve scalability at L1 level while enabling some L2s to build ZK-native roll ups with Ethereum.

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Ethereum has drastically changed in the past year now that it has rebranded itself as **Consensus/Settlement layer** for other Layer 2 Execution/Rollup networks. It is no longer trying to be a monolithic blockchain by itself. Because of this shift in design, many of its former CONs are no longer major issues. And many of the CONs that still exist often have a beneficial sides. > > I discuss the CONs of Ethereum and their impact on its users here: > > ## CONs > > **Gas Fees** (major): > > The biggest complaint for Ethereum is its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason much of DeFi is extremely expensive. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Basically: use a coin on a different network to avoid fees. > > Typical transaction fees for Ethereum were [between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $50+ several times in 2021. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees mid-year in 2021 saw $100-$200 gas fees. Transferring ERC-20 tokens (often $20-50) is also more gas expensive because it can't be done through native transfers like on the Cardano network. It's impractical to use swaps like Uniswap for small transactions due to these fees. > > In particular, One/Many-to-many batch transactions are extremely gas-expensive using Ethereum's account-based model compared to Bitcoin's and Cardano's UXTO-based model. [This batch transaction on Ethereum](https://etherscan.io/tx/0x0fe2542079644e107cbf13690eb9c2c65963ccb79089ff96bfaf8dced2331c92) cost over $5000 while [a similar eUXTO transaction on Cardano](https://adapools.org/transactions/e586c6340ee9e60a6c64f447feffe5f89bdabc7741666ecaa681081957938f56) only cost $0.50 in fees. > > On the other hand, these fees provide Ethereum long-term economic sustainability and resilience against DDoS and spam attacks. > > **Competition from other Smart Contract networks** (moderate): > > Ethereum has enjoyed its lead as the smart contract blockchain due to first-mover advantage. But there are now many efficient smart contract competitors like Algorand, Solana, and Cardano. Ethereum is now facing much competition. Who wants to pay $20 gas fees on Ethereum when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? > > Fortunately, the amount of competition is limited because Ethereum is positioning itself as a Settlement layer whereas these other networks are monolithic networks. All monolithic networks will eventually run into scaling issues due to long-term storage and bandwidth limits. It will really depend on how successful Ethereum's Layer 2 rollup solutions will be. > > **Future uncertainty about Layer 2 solutions** (major): > > Ethereum's long-term success is dependent on the success of its Layer 2 solutions. > > These Layer 2 solutions are still extremely early. Even after a year, L2 has a very fragmented adoption. The majority of centralized exchanges currently do not support Layer 2 rollup networks. A few have started to support Polygon, which is more of a Layer 2 side-chain that saves state every 256 blocks than a Layer 2 rollup. Very few CEXs allow for direct fiat on/off-ramping on L2 networks, which puts those networks out of reach of most users. > > Many of these Layer 2 networks (Arbitrum, Optimism, Loopring, ZKSync, etc), are not interoperable with each other. You can store your tokens on any specific L2 network, but they're stuck there. If you want to move your tokens back to Layer 1 or to another L2 network, you have to pay very expensive smart contract gas fees ($50-300). Eventually, there will be bridges between these networks, but we could be years away from widespread adoption. > > Fragmented liquidity is another huge issue. Each of these L2 networks has its own liquidity pool for each token it supports. You can store your token on the the L2 network, but you won't be able to trade or swap much if there are no liquidity pools for that token. Eventually, there will be Dynamic Automated Market Makers (dAMMs) that can share liquidity between networks, but they are complex and introduce their own weaknesses. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. They are very centralized in how they operate, so there's always the risk that their network operators could cheat their customers. By now, the community seems to agree that ZK rollups are the future rollup solution to decentralized L2 networks. There is only 1 notable instance of Plasma (Ethereum to Polygon network conversion), and no one uses it anymore since the Ethereum-Polygon bridge is easier to use. The biggest competitor to ZK rollups are Optimistic rollups, and those take too long to settle back to Layer 1 (1 week) and are still too expensive to use (20-50% of the cost of L1 Ethereum gas fees for transfers). > > **ZK Rollups** require special infrastructure to generate ZK Proofs. These are very computationally-expensive, potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly. To reduce the cost, they are done completely-centralized by specialized servers. Thus the cost of a ZK Rollup is cheap at about [$0.10 to $.30](https://l2fees.info/). But even at $0.10 per transfer and $0.50 per swap, these are still at least 10x more expensive than costs on Algorand and Solana. Users will have to decide whether the extra cost and hassle of using an L2 platform is worth the extra security of settling on the more-decentralized and secure Ethereum L1 network. > > **Ethereum Proof-of-Stake merge is arriving later than competitors** (moderate): > > The ETH PoS Beacon chain has been released, it's a completely separate blockchain from ETH and won't merge with the main blockchain [until later this year](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving its competitors plenty of time to provide FUD. We still don't know how successful the merge will be. Currently, stakes are locked, preventing investors from selling. We don't know what will happen to the price once staking unlocks. > > **MEV and Dark Forest attacks** (minor): > > [MEV](https://np.reddit.com/r/MPlankton/comments/rs4wp2/the_dark_forest_of_cryptocurrency/) is actually a pretty big issue for networks with high gas arbitrage and mempools like Ethereum, but most casual users will never notice hostile arbitrage. When you broadcast your transaction to the network, there are armies of bots and automated miners that analyze your transaction to see if they can perform arbitrage strategies on your transaction such as front-running, sandwiching, excluding transactions, stealing/replaying transactions, and other pure-profit plays. "Dark Forest" attacks have reveled that bots are constantly monitoring the network, and they can front-run you unless you have your own private army of miners. > > **Final Word** > > Overall, I still think the PROs outweigh the CONs for Ethereum in the long-run due to its first-mover advantage and the long-term sustainability of the Ethereum network. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2luf/top_10_ethereum_conarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

ScientificBeastMode

Right now, it seems like the only thing that will still work with decentralization is something using PoS consensus, bare-metal software execution (no VM, so nothing Ethereum-based), with L2 ZK rollups. IMO I think the best candidate for that is Solana, but they need to develop their L2 ecosystem to achieve that. Even now, without any L2’s they are still beating just about everything in the Ethereum ecosystem using just their L1. And they’re doing this because they have those first two pieces of the puzzle sufficiently solved. I’m open-minded, but that just seems like the most obvious path forward.

AvatarOfMomus

It's simply not possible to not have these systems not allow blocking, because even if the transaction is Zero Knowledge the website, app, or other service facilitating it is not and that group is then subject to court orders, regulations, etc. It's possible that eventually Ethereum or some other chain will integrate ZK at Layer 1, but then you're still stuck with the more expensive transaction costs, since the whole reason Layer 2 works is because it removes some of the distributed nature of the system in exchange for massively increased efficiency. Besides, at that point you're basically back to manually sharing some kind of wallet address to facilitate the transaction, so you may as well skip the ZK and just have something that spits out burner wallets for you on Ethereum Layer 1.

BMX-STEROIDZ

>and Polygon has alloacted $1 billion just for that with more than 4 zk scaling solutions on their chain right noe. Polygon has nothing, the spent $1b buying up all these ZK rollup solutions just to keep an even footing with Loopring and Loopring is way ahead on this. All of MATIC's solutions are fake side chains.

Ironside7

Everyone here mentioning Matic is kinda clueless. Matic is not a L2, it's a side chain with it's own security scheme. Matic will never be as secure as Eth for 2 reasons. 1. Bridge reliance. 2. Way more centralized / low validator count. It does not inherit base layer security. L2s sharing Eth's security are Arbitrum, Optimism, ZK roll ups, etc.. True L2s settle in Ethereum. Matic transactions settle in Polygon unless you need to cash out completely, at which point you must bridge. Bridges will always be a weak link, which is why cross chain protocols always get hacked.

lonely_filmmaker

Scalability .. that is how its better than Eth. Vitalik in his own words said that Eth was never built to be scalable and that is why he is pushing for all the L2 to get up to speed like loopring and Matic that use ZK proofs. Algo was built to be scalable and its decentralizes and secure which solves the trillema that Vitalik himself made famous. I agree that Algo at this point does not have the hype and shine of Eth but with time that will come. Dont follow the hype train but follow the tech...

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Ethereum has drastically changed in the past year now that it has rebranded itself as **Consensus/Settlement layer** for other Layer 2 Execution/Rollup networks. It is no longer trying to be a monolithic blockchain by itself. Because of this shift in design, many of its former CONs are no longer major issues. And many of the CONs that still exist often have a beneficial sides. > > I discuss the CONs of Ethereum and their impact on its users here: > > ## CONs > > **Gas Fees** (major): > > The biggest complaint for Ethereum is its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason much of DeFi is extremely expensive. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Basically: use a coin on a different network to avoid fees. > > Typical transaction fees for Ethereum were [between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $50+ several times in 2021. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees mid-year in 2021 saw $100-$200 gas fees. Transferring ERC-20 tokens (often $20-50) is also more gas expensive because it can't be done through native transfers like on the Cardano network. It's impractical to use swaps like Uniswap for small transactions due to these fees. > > In particular, One/Many-to-many batch transactions are extremely gas-expensive using Ethereum's account-based model compared to Bitcoin's and Cardano's UXTO-based model. [This batch transaction on Ethereum](https://etherscan.io/tx/0x0fe2542079644e107cbf13690eb9c2c65963ccb79089ff96bfaf8dced2331c92) cost over $5000 while [a similar eUXTO transaction on Cardano](https://adapools.org/transactions/e586c6340ee9e60a6c64f447feffe5f89bdabc7741666ecaa681081957938f56) only cost $0.50 in fees. > > On the other hand, these fees provide Ethereum long-term economic sustainability and resilience against DDoS and spam attacks. > > **Competition from other Smart Contract networks** (moderate): > > Ethereum has enjoyed its lead as the smart contract blockchain due to first-mover advantage. But there are now many efficient smart contract competitors like Algorand, Solana, and Cardano. Ethereum is now facing much competition. Who wants to pay $20 gas fees on Ethereum when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? > > Fortunately, the amount of competition is limited because Ethereum is positioning itself as a Settlement layer whereas these other networks are monolithic networks. All monolithic networks will eventually run into scaling issues due to long-term storage and bandwidth limits. It will really depend on how successful Ethereum's Layer 2 rollup solutions will be. > > **Future uncertainty about Layer 2 solutions** (major): > > Ethereum's long-term success is dependent on the success of its Layer 2 solutions. > > These Layer 2 solutions are still extremely early. Even after a year, L2 has a very fragmented adoption. The majority of centralized exchanges currently do not support Layer 2 rollup networks. A few have started to support Polygon, which is more of a Layer 2 side-chain that saves state every 256 blocks than a Layer 2 rollup. Very few CEXs allow for direct fiat on/off-ramping on L2 networks, which puts those networks out of reach of most users. > > Many of these Layer 2 networks (Arbitrum, Optimism, Loopring, ZKSync, etc), are not interoperable with each other. You can store your tokens on any specific L2 network, but they're stuck there. If you want to move your tokens back to Layer 1 or to another L2 network, you have to pay very expensive smart contract gas fees ($50-300). Eventually, there will be bridges between these networks, but we could be years away from widespread adoption. > > Fragmented liquidity is another huge issue. Each of these L2 networks has its own liquidity pool for each token it supports. You can store your token on the the L2 network, but you won't be able to trade or swap much if there are no liquidity pools for that token. Eventually, there will be Dynamic Automated Market Makers (dAMMs) that can share liquidity between networks, but they are complex and introduce their own weaknesses. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. They are very centralized in how they operate, so there's always the risk that their network operators could cheat their customers. By now, the community seems to agree that ZK rollups are the future rollup solution to decentralized L2 networks. There is only 1 notable instance of Plasma (Ethereum to Polygon network conversion), and no one uses it anymore since the Ethereum-Polygon bridge is easier to use. The biggest competitor to ZK rollups are Optimistic rollups, and those take too long to settle back to Layer 1 (1 week) and are still too expensive to use (20-50% of the cost of L1 Ethereum gas fees for transfers). > > **ZK Rollups** require special infrastructure to generate ZK Proofs. These are very computationally-expensive, potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly. To reduce the cost, they are done completely-centralized by specialized servers. Thus the cost of a ZK Rollup is cheap at about [$0.10 to $.30](https://l2fees.info/). But even at $0.10 per transfer and $0.50 per swap, these are still at least 10x more expensive than costs on Algorand and Solana. Users will have to decide whether the extra cost and hassle of using an L2 platform is worth the extra security of settling on the more-decentralized and secure Ethereum L1 network. > > **Ethereum Proof-of-Stake merge is arriving later than competitors** (moderate): > > The ETH PoS Beacon chain has been released, it's a completely separate blockchain from ETH and won't merge with the main blockchain [until later this year](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving its competitors plenty of time to provide FUD. We still don't know how successful the merge will be. Currently, stakes are locked, preventing investors from selling. We don't know what will happen to the price once staking unlocks. > > **MEV and Dark Forest attacks** (minor): > > [MEV](https://np.reddit.com/r/MPlankton/comments/rs4wp2/the_dark_forest_of_cryptocurrency/) is actually a pretty big issue for networks with high gas arbitrage and mempools like Ethereum, but most casual users will never notice hostile arbitrage. When you broadcast your transaction to the network, there are armies of bots and automated miners that analyze your transaction to see if they can perform arbitrage strategies on your transaction such as front-running, sandwiching, excluding transactions, stealing/replaying transactions, and other pure-profit plays. "Dark Forest" attacks have reveled that bots are constantly monitoring the network, and they can front-run you unless you have your own private army of miners. > > **Final Word** > > Overall, I still think the PROs outweigh the CONs for Ethereum in the long-run due to its first-mover advantage and the long-term sustainability of the Ethereum network. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2luf/top_10_ethereum_conarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Ethereum has drastically changed in the past year now that it has rebranded itself as **Consensus/Settlement layer** for other Layer 2 Execution/Rollup networks. It is no longer trying to be a monolithic blockchain by itself. Because of this shift in design, many of its former CONs are no longer major issues. And many of the CONs that still exist often have a beneficial sides. > > I discuss the CONs of Ethereum and their impact on its users here: > > ## CONs > > **Gas Fees** (major): > > The biggest complaint for Ethereum is its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason much of DeFi is extremely expensive. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Basically: use a coin on a different network to avoid fees. > > Typical transaction fees for Ethereum were [between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $50+ several times in 2021. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees mid-year in 2021 saw $100-$200 gas fees. Transferring ERC-20 tokens (often $20-50) is also more gas expensive because it can't be done through native transfers like on the Cardano network. It's impractical to use swaps like Uniswap for small transactions due to these fees. > > In particular, One/Many-to-many batch transactions are extremely gas-expensive using Ethereum's account-based model compared to Bitcoin's and Cardano's UXTO-based model. [This batch transaction on Ethereum](https://etherscan.io/tx/0x0fe2542079644e107cbf13690eb9c2c65963ccb79089ff96bfaf8dced2331c92) cost over $5000 while [a similar eUXTO transaction on Cardano](https://adapools.org/transactions/e586c6340ee9e60a6c64f447feffe5f89bdabc7741666ecaa681081957938f56) only cost $0.50 in fees. > > On the other hand, these fees provide Ethereum long-term economic sustainability and resilience against DDoS and spam attacks. > > **Competition from other Smart Contract networks** (moderate): > > Ethereum has enjoyed its lead as the smart contract blockchain due to first-mover advantage. But there are now many efficient smart contract competitors like Algorand, Solana, and Cardano. Ethereum is now facing much competition. Who wants to pay $20 gas fees on Ethereum when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? > > Fortunately, the amount of competition is limited because Ethereum is positioning itself as a Settlement layer whereas these other networks are monolithic networks. All monolithic networks will eventually run into scaling issues due to long-term storage and bandwidth limits. It will really depend on how successful Ethereum's Layer 2 rollup solutions will be. > > **Future uncertainty about Layer 2 solutions** (major): > > Ethereum's long-term success is dependent on the success of its Layer 2 solutions. > > These Layer 2 solutions are still extremely early. Even after a year, L2 has a very fragmented adoption. The majority of centralized exchanges currently do not support Layer 2 rollup networks. A few have started to support Polygon, which is more of a Layer 2 side-chain that saves state every 256 blocks than a Layer 2 rollup. Very few CEXs allow for direct fiat on/off-ramping on L2 networks, which puts those networks out of reach of most users. > > Many of these Layer 2 networks (Arbitrum, Optimism, Loopring, ZKSync, etc), are not interoperable with each other. You can store your tokens on any specific L2 network, but they're stuck there. If you want to move your tokens back to Layer 1 or to another L2 network, you have to pay very expensive smart contract gas fees ($50-300). Eventually, there will be bridges between these networks, but we could be years away from widespread adoption. > > Fragmented liquidity is another huge issue. Each of these L2 networks has its own liquidity pool for each token it supports. You can store your token on the the L2 network, but you won't be able to trade or swap much if there are no liquidity pools for that token. Eventually, there will be Dynamic Automated Market Makers (dAMMs) that can share liquidity between networks, but they are complex and introduce their own weaknesses. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. They are very centralized in how they operate, so there's always the risk that their network operators could cheat their customers. By now, the community seems to agree that ZK rollups are the future rollup solution to decentralized L2 networks. There is only 1 notable instance of Plasma (Ethereum to Polygon network conversion), and no one uses it anymore since the Ethereum-Polygon bridge is easier to use. The biggest competitor to ZK rollups are Optimistic rollups, and those take too long to settle back to Layer 1 (1 week) and are still too expensive to use (20-50% of the cost of L1 Ethereum gas fees for transfers). > > **ZK Rollups** require special infrastructure to generate ZK Proofs. These are very computationally-expensive, potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly. To reduce the cost, they are done completely-centralized by specialized servers. Thus the cost of a ZK Rollup is cheap at about [$0.10 to $.30](https://l2fees.info/). But even at $0.10 per transfer and $0.50 per swap, these are still at least 10x more expensive than costs on Algorand and Solana. Users will have to decide whether the extra cost and hassle of using an L2 platform is worth the extra security of settling on the more-decentralized and secure Ethereum L1 network. > > **Ethereum Proof-of-Stake merge is arriving later than competitors** (moderate): > > The ETH PoS Beacon chain has been released, it's a completely separate blockchain from ETH and won't merge with the main blockchain [until later this year](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving its competitors plenty of time to provide FUD. We still don't know how successful the merge will be. Currently, stakes are locked, preventing investors from selling. We don't know what will happen to the price once staking unlocks. > > **MEV and Dark Forest attacks** (minor): > > [MEV](https://np.reddit.com/r/MPlankton/comments/rs4wp2/the_dark_forest_of_cryptocurrency/) is actually a pretty big issue for networks with high gas arbitrage and mempools like Ethereum, but most casual users will never notice hostile arbitrage. When you broadcast your transaction to the network, there are armies of bots and automated miners that analyze your transaction to see if they can perform arbitrage strategies on your transaction such as front-running, sandwiching, excluding transactions, stealing/replaying transactions, and other pure-profit plays. "Dark Forest" attacks have reveled that bots are constantly monitoring the network, and they can front-run you unless you have your own private army of miners. > > **Final Word** > > Overall, I still think the PROs outweigh the CONs for Ethereum in the long-run due to its first-mover advantage and the long-term sustainability of the Ethereum network. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2luf/top_10_ethereum_conarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Ethereum has drastically changed in the past year now that it has rebranded itself as **Consensus/Settlement layer** for other Layer 2 Execution/Rollup networks. It is no longer trying to be a monolithic blockchain by itself. Because of this shift in design, many of its former CONs are no longer major issues. And many of the CONs that still exist often have a beneficial sides. > > I discuss the CONs of Ethereum and their impact on its users here: > > ## CONs > > **Gas Fees** (major): > > The biggest complaint for Ethereum is its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason much of DeFi is extremely expensive. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Basically: use a coin on a different network to avoid fees. > > Typical transaction fees for Ethereum were [between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $50+ several times in 2021. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees mid-year in 2021 saw $100-$200 gas fees. Transferring ERC-20 tokens (often $20-50) is also more gas expensive because it can't be done through native transfers like on the Cardano network. It's impractical to use swaps like Uniswap for small transactions due to these fees. > > In particular, One/Many-to-many batch transactions are extremely gas-expensive using Ethereum's account-based model compared to Bitcoin's and Cardano's UXTO-based model. [This batch transaction on Ethereum](https://etherscan.io/tx/0x0fe2542079644e107cbf13690eb9c2c65963ccb79089ff96bfaf8dced2331c92) cost over $5000 while [a similar eUXTO transaction on Cardano](https://adapools.org/transactions/e586c6340ee9e60a6c64f447feffe5f89bdabc7741666ecaa681081957938f56) only cost $0.50 in fees. > > On the other hand, these fees provide Ethereum long-term economic sustainability and resilience against DDoS and spam attacks. > > **Competition from other Smart Contract networks** (moderate): > > Ethereum has enjoyed its lead as the smart contract blockchain due to first-mover advantage. But there are now many efficient smart contract competitors like Algorand, Solana, and Cardano. Ethereum is now facing much competition. Who wants to pay $20 gas fees on Ethereum when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? > > Fortunately, the amount of competition is limited because Ethereum is positioning itself as a Settlement layer whereas these other networks are monolithic networks. All monolithic networks will eventually run into scaling issues due to long-term storage and bandwidth limits. It will really depend on how successful Ethereum's Layer 2 rollup solutions will be. > > **Future uncertainty about Layer 2 solutions** (major): > > Ethereum's long-term success is dependent on the success of its Layer 2 solutions. > > These Layer 2 solutions are still extremely early. Even after a year, L2 has a very fragmented adoption. The majority of centralized exchanges currently do not support Layer 2 rollup networks. A few have started to support Polygon, which is more of a Layer 2 side-chain that saves state every 256 blocks than a Layer 2 rollup. Very few CEXs allow for direct fiat on/off-ramping on L2 networks, which puts those networks out of reach of most users. > > Many of these Layer 2 networks (Arbitrum, Optimism, Loopring, ZKSync, etc), are not interoperable with each other. You can store your tokens on any specific L2 network, but they're stuck there. If you want to move your tokens back to Layer 1 or to another L2 network, you have to pay very expensive smart contract gas fees ($50-300). Eventually, there will be bridges between these networks, but we could be years away from widespread adoption. > > Fragmented liquidity is another huge issue. Each of these L2 networks has its own liquidity pool for each token it supports. You can store your token on the the L2 network, but you won't be able to trade or swap much if there are no liquidity pools for that token. Eventually, there will be Dynamic Automated Market Makers (dAMMs) that can share liquidity between networks, but they are complex and introduce their own weaknesses. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. They are very centralized in how they operate, so there's always the risk that their network operators could cheat their customers. By now, the community seems to agree that ZK rollups are the future rollup solution to decentralized L2 networks. There is only 1 notable instance of Plasma (Ethereum to Polygon network conversion), and no one uses it anymore since the Ethereum-Polygon bridge is easier to use. The biggest competitor to ZK rollups are Optimistic rollups, and those take too long to settle back to Layer 1 (1 week) and are still too expensive to use (20-50% of the cost of L1 Ethereum gas fees for transfers). > > **ZK Rollups** require special infrastructure to generate ZK Proofs. These are very computationally-expensive, potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly. To reduce the cost, they are done completely-centralized by specialized servers. Thus the cost of a ZK Rollup is cheap at about [$0.10 to $.30](https://l2fees.info/). But even at $0.10 per transfer and $0.50 per swap, these are still at least 10x more expensive than costs on Algorand and Solana. Users will have to decide whether the extra cost and hassle of using an L2 platform is worth the extra security of settling on the more-decentralized and secure Ethereum L1 network. > > **Ethereum Proof-of-Stake merge is arriving later than competitors** (moderate): > > The ETH PoS Beacon chain has been released, it's a completely separate blockchain from ETH and won't merge with the main blockchain [until later this year](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving its competitors plenty of time to provide FUD. We still don't know how successful the merge will be. Currently, stakes are locked, preventing investors from selling. We don't know what will happen to the price once staking unlocks. > > **MEV and Dark Forest attacks** (minor): > > [MEV](https://np.reddit.com/r/MPlankton/comments/rs4wp2/the_dark_forest_of_cryptocurrency/) is actually a pretty big issue for networks with high gas arbitrage and mempools like Ethereum, but most casual users will never notice hostile arbitrage. When you broadcast your transaction to the network, there are armies of bots and automated miners that analyze your transaction to see if they can perform arbitrage strategies on your transaction such as front-running, sandwiching, excluding transactions, stealing/replaying transactions, and other pure-profit plays. "Dark Forest" attacks have reveled that bots are constantly monitoring the network, and they can front-run you unless you have your own private army of miners. > > **Final Word** > > Overall, I still think the PROs outweigh the CONs for Ethereum in the long-run due to its first-mover advantage and the long-term sustainability of the Ethereum network. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2luf/top_10_ethereum_conarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

snow3dmodels

They would need to build their own blockchain to do something as large as that? There will come a day where a ZK rollup/L2 exchange comes out with very little fees if any. CRONOS could potentially overtake Coinbase once they sort their shit out with fees nd grown their blockchain TVL

Due_Character7533

"You guys just keep making excuses for an L1 that’s been in the ‘building’ phase for its entire existence." What utter B.S ...No excuses needed. F me, BTC and ETH are still by the same logic in building phases then and have been since the start, what are you even saying at this point... Lighting network and the Eth merger saga? (ongoing for over 5 yeas) - theres still building going on soooo both those chains continue to be building in that case? Pretty much All bloody chains are building you muppet, were not finished yet are we, what chain is ready to roll out and replace the global financial system...Ill give you a clue, its none of them. Smart contracts are here, I can view the submits and code being written all day for various protocols... I use swaps and provide liquidity, Ive interacted with Milkomeda, I speak with Devs every day working on the chain, I'm in the community calls learning about whats been built and what else is coming next, Im voting on catalyst proposals. I'm looking forward to the imminent launch of various protocols from Ardana, Liqwid, Indigo etc... This isnt some faw away pipe dream, its here and it's going to continue to pick up pace as the year moves on with Orbis' ZK rollup solution, Hydras first implimentations. We dont need Cardano to be fully scalable tomorrow, we need it to work for each stage it rolls out, ideally without breaking in the process as it scales over time and in line with crypto adoption. Once again it is absolutely Baseless NONSENSE that Cardano is unable to scale - Quantify the statement dont just say stupid throwaway comments like this (without copy pasting something you dont understand AGAIN) What are you even saying, are you saying in its current form? Or do you not understand what layer 2's are for? ... if you cant do that yourself in your own words, maybe ask yourself...am I actually that sure Im right ... is it possible I'm wrong and allowing my tribalism to get in the way. cos the last time you were called out for saying this stuff you copy pasted a statement you believed was a slam dunk and that statement was immediately deconstructed in its entirety and exposed for the incorrect rubbish it was. I have ZERO issue with saying there have been delays along the way, significant ones at that. But jheez show me the chain or tech company that hasn't in this space. Get over yourself

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Polygon Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **CONs** > > **Still requires the Ethereum network** > > The Polygon PoS network is a side chain for Ethereum. It has its own network security, but staking is still done on the Ethereum network and requires paying expensive Ethereum smart contract gas fees. > > Similarly, going from Layer 1 Ethereum to Polygon is mainly done through the Polygon PoS bridge, which also costs expensive Ethereum gas fees. (This will gradually phase out as more CEXs provide direct onramp to the Polygon PoS network.) > > **Has plenty of competitors** > > There are just too many competitors, which dilutes adoption and liquidity for Polygon's ecosystem. While Polygon PoS isn't a direct competitor to most Layer 2 rollups and monolithic "Ethereum killers" because it is designed from ground up to be Ethereum sidechain, it does experience indirect competition. And the other Polygon Layer 2 rollup projects are direct competitors. As of Jan 2021, Polygon Hermez is only in [17th place in TLV](https://l2beat.com/). > > **Less resistant to DDoS attacks** > > Like all networks with low transaction fees, it at risk to DDoS attacks since the barrier to making transactions is low > > In early Jan 2022, [Sunflowers Farm \(SFF\) unintentionally DDoS-attacked the Polygon PoS network](https://www.coindesk.com/tech/2022/01/06/polygon-under-accidental-attack-from-swarm-of-sunflower-farmers/) and completely congested the network because it was more profitable to play the game and spam transactions than pay network fees. Transaction fees shot up 20x. Eventually, a hacker exploited the SFF game and reduced its price to zero, and users rejoiced because it cleared the congestion. > > **Centralized governance of the PoS chain** > > Governance is currently centralized. > > The Polygon team single-handedly [increased the transaction fee from 1 to 30 Gwei in Oct 2021](https://thedefiant.io/polygon-transaction-fee-hike/) to combat spammers. They didn't communicate this with the community or ask for feedback ahead of time. > > The Polygon team also [secretly hard-forked the network](https://cryptobriefing.com/a-hacker-stole-1-6m-after-exploiting-a-polygon-bug/) by pushing out a patch 1 day after a hacker stole $1.6M from the network from the Polygon PoS genesis contract in Dec 2021. The team didn't publicize the reason for the emergency patch until over 3 weeks later. > > They have only very recently starting looking to decentralize governance through a [Polygon Ecosystem DAO](https://blog.polygon.technology/state-of-governance-decentralization/), but that could be a long time away. > > Also, the top 4 staking validators out of a total of 100 validators [own 49% of the supply](https://wallet.polygon.technology/staking/) of MATIC, but the staking validators are only used for validation and [block production](https://forum.matic.network/t/matic-system-overview-bor/126), not governance. > > **Split attention on multiple projects** > > For better or worse, Polygon is working on multiple Layer 2 solutions (Polygon PoS, Hermez, Zero, Miden, Nightfall, Avail) and constantly researching different protocols. This is a rather Google-like decision to have multiple competiting products where it becomes the Jack-of-all-trades, Master-of-none. Some of these protocols are really exciting, but the crypto community doesn't know about them because there are too many to focus on. > > **Tokenomics of MATIC Tokens** > > The MATIC token has limited utility. It's used for staking (validation and block production). Once the pool of staking rewards runs out of funds, all staking rewards will need to come from transaction fees, which are tiny. Currently only 75% of the coins are in circulation, and the Polygon Team has an ongoing [token release schedule](https://research.binance.com/en/projects/matic-network) for dumping tokens on the open market. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yk4/coin_inquiries_round_polygon_conarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

AvatarOfMomus

> Well once something is minted, it's pretty much already in everyone else's system and on a universal hub, all the connecting at that point and how others use it isn't the developers problem anymore. That's not what I'm talking about, I'm talking about maintaining the computer code that connects to the blockchain(s) as well as all of the code on their side that has to deal with that piece of their code. A *really* rough analogy would be the difference between wiring inside your house and the powerlines outside. The wiring in your house is basically just there, unless you have changes made to it it will just work. External powerlines are exposed to the weather, idiot drivers, and generally a lot more wear and tear than the wiring in your walls. The API and item management system that's entirely internal to the game is the wiring in your walls, the power lines are integrating NFTs into your game. > Not nesessarily just the community, things grow and emerge. Tokentrove representing 50 or so games with their awesome Inventory layout and appraisal, they may be an emerging giant to represent thousands of games in the future. > I can't comment much on this, except for saying when the GU marketplace was down because they were doing maintenance, and I couldn't see the images, the 3rd party marketplaces still worked That's because those third party sites will have cached the images on their servers, basically made a local copy of them. That doesn't change the problem I laid out though, which is that this all works fine for JPGs but as soon as you get into more complicated items then the marketplace has to start doing individual work for each game. The tradeoffs and risks with this could be a whole other thread, but it can basically be chalked up as another cost in time and money, either by the developer or by the marketplace. > I think you still can depending on the game. Unless it's like VR or something and you're really going for that face to face person to person trading experience. Games, by their nature, tend to not behave as well when you tab away from them, or you run them in "Borderless Windowed" mode and they perform worse as a result. Neither is ideal. Also most players still don't have multiple monitors, so having to tab away from the game to do things creates a bad experience for them. All of these things limit the potential market for a game and push it away from actually being "good" and seeing wide adoption. Consider if in Minecraft, instead of being able to just throw items on the ground for someone standing in front of you you had to go and find their name on a website, load up your inventory on that website, and then drag items over to them which they then had to accept. Not a good experience. > Agreed, however once these outside hubs become large enough, games can just integrate it within the game itself saving a lot of work Oh gods no. That is *not* a savings in work, that is a massive pain in the anatomy. There are basically two options for this, neither of them good or easy. Option 1: The third party site of choice, because you won't do this with more than one, publishes an API for their site that allows the devs to basically run their back-end code through a dev-created UI in the game. This requires more work from the third party site's developers, and is probably actually more work than just using their own existing Blockchain integrations and implementing a store. Option 2: Try and get a web browser working inside the game without it crashing, bugging out, or otherwise having massive problems and then restrict it so that it can't be used to hack or otherwise break the game itself, and *THEN* make sure the third party store site or sites still work in it. I really can not express how much work Option 2 is, you don't have the technical knowledge for the explanation to be less than 5 pages. What I can do, is point out that several older MMOs had web browsers within their game clients. They've all since been removed. The most notable was probably Eve Online's, which was removed because it was buggy, old, full of security holes, and the work required to maintain it would have been an entire extra development team. Which should make a lot of sense when you consider that Chrome, Firefox, and whatever Microsoft is calling their browser these days all have large teams or entire companies dedicated to their development and maintenance. > It's there for a reason. A lot of people are extreamly uneducated about crypto. It's there mostly because it's easier than engaging critically with criticism, or worse admitting that the detractors have a point. Yes, a lot of people don't know much about crypto, but a lot of people in crypto don't know much about economics or software, and a lot of these *very* valid criticisms are coming from people with in-depth knowledge of one or both of these things. > "On Immutable X, we’ve minted 8 million NFT cards with only ~1,030kWh = 844 kg CO2. To put this in perspective a one-way flight from LAX to NYC is 807 kWh = 662 kg CO2." Okay? None of that actually says what their costs are... I actually ended up digging through Immutable X's website and found [their blog post on their tech stack](https://immutablex.medium.com/explainer-on-how-our-design-architecture-powers-the-future-of-nfts-c05a9efc19fd) and from what I can tell they've basically gotten around the problem by not actually running a true blockchain for data storage. They're charging devs a fee to use their system, and then the devs can either use ZK-Rollup, which is just a basic rollup model on Etherium, or what they call Volition which, as near as I can tell, isn't so much a blockchain as a distributed data store. Apparently, in theory, users can choose to use ZK-Rollup, but that will encure gas fees per transaction, and they specifically call out GU as *not* using this model due to its costs. It's possible the Volition model is storing some kind of verification data or hash on a true blockchain somewhere, but they don't go into that in the blog post. s/ And oh look, they've got an API to make it easier for developers to interact with their data store! Because, and who could have guessed, integrating directly with the blockchain is complicated and costly! /s Seriously though, what they seem to have done is basically taken as much of the blockchain out of the blockchain as possible, for all the reasons I've been outlining for why using a blockchain for item trading and storage is inefficient and costly. > They're born because currently there isn't much viable in crypto and it's pretty much all scams. They're correct about that, just entirely wrong about it's future and thinking that's all it can be. This isn't correct. These criticisms come from a deep understanding of software development, game design and development, and the technical basis for crypto currency and NFTs and using all of that knowledge to see how NFTs make games *worse* and not *better*. Not everything that someone can think of or dream is possible. Some things are just not mutually compatible, or are just worse together, for reasons fundamental to those two things. The only reason we have NFT games right now is because this absurd notion of taking items between games caught on in the crypto community and someone looked at that and said "Oh man, I bet these people with money would spend *extra* for this feature in a game!". Turns out they were right, which is why most NFT games aren't good games, they're not trying to make a good game they're trying to make money. The people trying to make actually good games are ignoring NFTs unless someone with money comes along and says "I'll fund development of your game, but you have to cram some NFTs into it" at which point the developer has to decide if they're willing to sell out their vision and a tiny piece of their soul in order to be able to make games for a living. > If no one cared, tokentrove wouldn't have had grounds to become a viable business. See the note I made about "no one" being a tiny tiny slice of the overall gaming population. It's just not enough people for any developer to bother targeting them when doing so is going to cost them hundred of thousands or millions of dollars in development costs, and make their game overall worse for it. Also Tokentrove may or may not actually have positive cash flow, but if we assume that it does and it's not collecting any sort of transaction fees, then it's probably funded largely or entirely by some combination of advertising and selling user data. Which is probably perfectly viable for them since they basically just have web hosting costs plus paying 10ish developers, and there's a lot of ad money in the crypto space right now. It also helps that they're targeting I think you said 50+ games, which means they're getting a lot more user traffic than any one of those games would get on its own. They also don't have to bear any of the costs that the developers do, so if half those games fail it doesn't hurt Tokentrove that much.

CointestAdmin

#Polygon Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **CONs** > > **Still requires the Ethereum network** > > The Polygon PoS network is a side chain for Ethereum. It has its own network security, but staking is still done on the Ethereum network and requires paying expensive Ethereum smart contract gas fees. > > Similarly, going from Layer 1 Ethereum to Polygon is mainly done through the Polygon PoS bridge, which also costs expensive Ethereum gas fees. (This will gradually phase out as more CEXs provide direct onramp to the Polygon PoS network.) > > **Has plenty of competitors** > > There are just too many competitors, which dilutes adoption and liquidity for Polygon's ecosystem. While Polygon PoS isn't a direct competitor to most Layer 2 rollups and monolithic "Ethereum killers" because it is designed from ground up to be Ethereum sidechain, it does experience indirect competition. And the other Polygon Layer 2 rollup projects are direct competitors. As of Jan 2021, Polygon Hermez is only in [17th place in TLV](https://l2beat.com/). > > **Less resistant to DDoS attacks** > > Like all networks with low transaction fees, it at risk to DDoS attacks since the barrier to making transactions is low > > In early Jan 2022, [Sunflowers Farm \(SFF\) unintentionally DDoS-attacked the Polygon PoS network](https://www.coindesk.com/tech/2022/01/06/polygon-under-accidental-attack-from-swarm-of-sunflower-farmers/) and completely congested the network because it was more profitable to play the game and spam transactions than pay network fees. Transaction fees shot up 20x. Eventually, a hacker exploited the SFF game and reduced its price to zero, and users rejoiced because it cleared the congestion. > > **Centralized governance of the PoS chain** > > Governance is currently centralized. > > The Polygon team single-handedly [increased the transaction fee from 1 to 30 Gwei in Oct 2021](https://thedefiant.io/polygon-transaction-fee-hike/) to combat spammers. They didn't communicate this with the community or ask for feedback ahead of time. > > The Polygon team also [secretly hard-forked the network](https://cryptobriefing.com/a-hacker-stole-1-6m-after-exploiting-a-polygon-bug/) by pushing out a patch 1 day after a hacker stole $1.6M from the network from the Polygon PoS genesis contract in Dec 2021. The team didn't publicize the reason for the emergency patch until over 3 weeks later. > > They have only very recently starting looking to decentralize governance through a [Polygon Ecosystem DAO](https://blog.polygon.technology/state-of-governance-decentralization/), but that could be a long time away. > > Also, the top 4 staking validators out of a total of 100 validators [own 49% of the supply](https://wallet.polygon.technology/staking/) of MATIC, but the staking validators are only used for validation and [block production](https://forum.matic.network/t/matic-system-overview-bor/126), not governance. > > **Split attention on multiple projects** > > For better or worse, Polygon is working on multiple Layer 2 solutions (Polygon PoS, Hermez, Zero, Miden, Nightfall, Avail) and constantly researching different protocols. This is a rather Google-like decision to have multiple competiting products where it becomes the Jack-of-all-trades, Master-of-none. Some of these protocols are really exciting, but the crypto community doesn't know about them because there are too many to focus on. > > **Tokenomics of MATIC Tokens** > > The MATIC token has limited utility. It's used for staking (validation and block production). Once the pool of staking rewards runs out of funds, all staking rewards will need to come from transaction fees, which are tiny. Currently only 75% of the coins are in circulation, and the Polygon Team has an ongoing [token release schedule](https://research.binance.com/en/projects/matic-network) for dumping tokens on the open market. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yk4/coin_inquiries_round_polygon_conarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

pimpiulauf

The government is using the recent happening around Luna as a means to target crypto exchanges for regulations but that won't be true decentralization I guess. Every user deserves their privacy and if anyone ever needs to be transparent, a privacy solution like Railgun and some others can generate a verifiable report of transactions and balances for compliance of any kind if need be, with a privacy-preserving ZK method instead of being public.

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

coinfeeds-bot

tldr; Loopring (LRC-USD) is a zero-knowledge rollup (ZK-rollup), which is a Layer 2 scalability solution for the Ethereum network. It was one of the most discussed cryptocurrencies in late 2021, but it has since steadily declined in both value and popularity. However, investors should not lose hope for LRC in the long term due to its connection to ETH. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*

CointestAdmin

#Polygon Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **CONs** > > **Still requires the Ethereum network** > > The Polygon PoS network is a side chain for Ethereum. It has its own network security, but staking is still done on the Ethereum network and requires paying expensive Ethereum smart contract gas fees. > > Similarly, going from Layer 1 Ethereum to Polygon is mainly done through the Polygon PoS bridge, which also costs expensive Ethereum gas fees. (This will gradually phase out as more CEXs provide direct onramp to the Polygon PoS network.) > > **Has plenty of competitors** > > There are just too many competitors, which dilutes adoption and liquidity for Polygon's ecosystem. While Polygon PoS isn't a direct competitor to most Layer 2 rollups and monolithic "Ethereum killers" because it is designed from ground up to be Ethereum sidechain, it does experience indirect competition. And the other Polygon Layer 2 rollup projects are direct competitors. As of Jan 2021, Polygon Hermez is only in [17th place in TLV](https://l2beat.com/). > > **Less resistant to DDoS attacks** > > Like all networks with low transaction fees, it at risk to DDoS attacks since the barrier to making transactions is low > > In early Jan 2022, [Sunflowers Farm \(SFF\) unintentionally DDoS-attacked the Polygon PoS network](https://www.coindesk.com/tech/2022/01/06/polygon-under-accidental-attack-from-swarm-of-sunflower-farmers/) and completely congested the network because it was more profitable to play the game and spam transactions than pay network fees. Transaction fees shot up 20x. Eventually, a hacker exploited the SFF game and reduced its price to zero, and users rejoiced because it cleared the congestion. > > **Centralized governance of the PoS chain** > > Governance is currently centralized. > > The Polygon team single-handedly [increased the transaction fee from 1 to 30 Gwei in Oct 2021](https://thedefiant.io/polygon-transaction-fee-hike/) to combat spammers. They didn't communicate this with the community or ask for feedback ahead of time. > > The Polygon team also [secretly hard-forked the network](https://cryptobriefing.com/a-hacker-stole-1-6m-after-exploiting-a-polygon-bug/) by pushing out a patch 1 day after a hacker stole $1.6M from the network from the Polygon PoS genesis contract in Dec 2021. The team didn't publicize the reason for the emergency patch until over 3 weeks later. > > They have only very recently starting looking to decentralize governance through a [Polygon Ecosystem DAO](https://blog.polygon.technology/state-of-governance-decentralization/), but that could be a long time away. > > Also, the top 4 staking validators out of a total of 100 validators [own 49% of the supply](https://wallet.polygon.technology/staking/) of MATIC, but the staking validators are only used for validation and [block production](https://forum.matic.network/t/matic-system-overview-bor/126), not governance. > > **Split attention on multiple projects** > > For better or worse, Polygon is working on multiple Layer 2 solutions (Polygon PoS, Hermez, Zero, Miden, Nightfall, Avail) and constantly researching different protocols. This is a rather Google-like decision to have multiple competiting products where it becomes the Jack-of-all-trades, Master-of-none. Some of these protocols are really exciting, but the crypto community doesn't know about them because there are too many to focus on. > > **Tokenomics of MATIC Tokens** > > The MATIC token has limited utility. It's used for staking (validation and block production). Once the pool of staking rewards runs out of funds, all staking rewards will need to come from transaction fees, which are tiny. Currently only 75% of the coins are in circulation, and the Polygon Team has an ongoing [token release schedule](https://research.binance.com/en/projects/matic-network) for dumping tokens on the open market. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yk4/coin_inquiries_round_polygon_conarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

latolat2

That's cause Coinbase is ran in a stupid way, can't convince me otherwise. Binance is expanding still, hell even Polygon leaked an email about how they're doubling down during this bear market while Concordium are hiring every ZK researcher in the space

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

jakekick1999

Polygon will be the juicy choice. Looking at the ETH 2.0 map and Polygon also announcing ZK Rollups it will be the best move from a financial and marketing standpoint.

callunquirka

I haven't looked into it lately, but back in 2017 it was a currency focused coin similar to BCH and DASH. But with optional privacy. It was one of the first coins to use ZK concepts in cryptocurrency.

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

DerpJungler

Yes I am on the same path right now. During the bull run I started throwing little bit of extra cash on every shiny project I could see thinking "oh, ZK-rollups are the future!" and "yes we definitely need interoperability, this is gonna 10x!" but at the end of the day, when the economy shits the bed, you realize that hype doesn't last forever. That's why the level headed investors who have been here for a while suggest holding the largest amount of your portfolio into BTC/ETH.

joshcd7474

First off, you really should look into what a blockchain actually is before investing in them. What blockchains *are* is nothing more or less than the only decentralized way we know of to store data on the internet (the only other known way is databases). The reason this is significant is: it enables property rights on the internet. It enables data ownership. This in a verifiable way, making this data storage “trustless”, and with ZK proofs, also private. In an increasingly digital world, this is extremely important (like, very)! Google and Facebook currently have access to everything you put on the internet, and this is (kind of) fine today, but what about when everyone is wearing AR devices, sending live location, has cameras, a mic, and other very useful internet things but totally making our whole lives pass through servers where this data could be manipulated, used? What happens if some malicious actor gains access to this? Or some politician starts regulating based on this? Blockchains are nothing less than the only way we know of to maintain sovereignty of our lives in a digital world. It also provides an enormous potential for innovation, since it makes markets a lot more efficient since it reduces “trust transaction costs” (read “markets are eating the world” on ribbonfarm to better understand this idea), an innovation on par with the invention of our judiciary system. Ethereum, Bitcoin, and other protocols are simply the “base layer” on top of which anything can be built. To better understand protocol vs service, think of e-mail vs twitter. I can send an email from gmail, outlook, or my own server if I want, and my friend can receive it on any interface he wants as well (protocol, on top of which we build interfaces). If I want to write something online though, I need to go through twitter, facebook, etc, and they can decide if I have access or not (like our friend Trump learned to his sorrow). There is no “e-mail CEO” that can throw you out of the e-mail protocol. The difference between specific blockchains is how secure they are, how many transactions per second they allow, how programmatic they are. But they are PROTOCOLS, not services. Some tokens are built on top of Ethereum /Solana/Avalanche (Aave, Curve, NFTs for example), and these are services/assets which simply have a different business model than traditional LLCs. Read “fat protocols” and “thin applications” on usv for more of this. In terms of understanding NFTs and their societal significance (which is enormous), go watch punk6529’s interview on real vision. A bit lengthy, but I guarantee you will understand a lot more afterwards. Also always remember, this is really young technology and it is fast evolving, investing in all of these protocols/services/assets is very risky, we are still figuring out the best ways to use this tech. Never invest more than you can afford to lose.

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

UcharsiU

Suck it up and back to work. You might be down op but your daughter needs you. 

CointestAdmin

#Polygon Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **CONs** > > **Still requires the Ethereum network** > > The Polygon PoS network is a side chain for Ethereum. It has its own network security, but staking is still done on the Ethereum network and requires paying expensive Ethereum smart contract gas fees. > > Similarly, going from Layer 1 Ethereum to Polygon is mainly done through the Polygon PoS bridge, which also costs expensive Ethereum gas fees. (This will gradually phase out as more CEXs provide direct onramp to the Polygon PoS network.) > > **Has plenty of competitors** > > There are just too many competitors, which dilutes adoption and liquidity for Polygon's ecosystem. While Polygon PoS isn't a direct competitor to most Layer 2 rollups and monolithic "Ethereum killers" because it is designed from ground up to be Ethereum sidechain, it does experience indirect competition. And the other Polygon Layer 2 rollup projects are direct competitors. As of Jan 2021, Polygon Hermez is only in [17th place in TLV](https://l2beat.com/). > > **Less resistant to DDoS attacks** > > Like all networks with low transaction fees, it at risk to DDoS attacks since the barrier to making transactions is low > > In early Jan 2022, [Sunflowers Farm \(SFF\) unintentionally DDoS-attacked the Polygon PoS network](https://www.coindesk.com/tech/2022/01/06/polygon-under-accidental-attack-from-swarm-of-sunflower-farmers/) and completely congested the network because it was more profitable to play the game and spam transactions than pay network fees. Transaction fees shot up 20x. Eventually, a hacker exploited the SFF game and reduced its price to zero, and users rejoiced because it cleared the congestion. > > **Centralized governance of the PoS chain** > > Governance is currently centralized. > > The Polygon team single-handedly [increased the transaction fee from 1 to 30 Gwei in Oct 2021](https://thedefiant.io/polygon-transaction-fee-hike/) to combat spammers. They didn't communicate this with the community or ask for feedback ahead of time. > > The Polygon team also [secretly hard-forked the network](https://cryptobriefing.com/a-hacker-stole-1-6m-after-exploiting-a-polygon-bug/) by pushing out a patch 1 day after a hacker stole $1.6M from the network from the Polygon PoS genesis contract in Dec 2021. The team didn't publicize the reason for the emergency patch until over 3 weeks later. > > They have only very recently starting looking to decentralize governance through a [Polygon Ecosystem DAO](https://blog.polygon.technology/state-of-governance-decentralization/), but that could be a long time away. > > Also, the top 4 staking validators out of a total of 100 validators [own 49% of the supply](https://wallet.polygon.technology/staking/) of MATIC, but the staking validators are only used for validation and [block production](https://forum.matic.network/t/matic-system-overview-bor/126), not governance. > > **Split attention on multiple projects** > > For better or worse, Polygon is working on multiple Layer 2 solutions (Polygon PoS, Hermez, Zero, Miden, Nightfall, Avail) and constantly researching different protocols. This is a rather Google-like decision to have multiple competiting products where it becomes the Jack-of-all-trades, Master-of-none. Some of these protocols are really exciting, but the crypto community doesn't know about them because there are too many to focus on. > > **Tokenomics of MATIC Tokens** > > The MATIC token has limited utility. It's used for staking (validation and block production). Once the pool of staking rewards runs out of funds, all staking rewards will need to come from transaction fees, which are tiny. Currently only 75% of the coins are in circulation, and the Polygon Team has an ongoing [token release schedule](https://research.binance.com/en/projects/matic-network) for dumping tokens on the open market. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yk4/coin_inquiries_round_polygon_conarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

coinfeeds-bot

tldr; Polygon Hermez is set to release a ZK-Rollup implementation of the Ethereum Virtual Machine (EVM). ZK Rollups have been dubbed by Vitalik Buterin as the most robust and secure long-term option for scaling Ethereum. Polygon has been teasing this release since late January and it appears it may be coming soon. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*

CointestAdmin

#Polygon Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **CONs** > > **Still requires the Ethereum network** > > The Polygon PoS network is a side chain for Ethereum. It has its own network security, but staking is still done on the Ethereum network and requires paying expensive Ethereum smart contract gas fees. > > Similarly, going from Layer 1 Ethereum to Polygon is mainly done through the Polygon PoS bridge, which also costs expensive Ethereum gas fees. (This will gradually phase out as more CEXs provide direct onramp to the Polygon PoS network.) > > **Has plenty of competitors** > > There are just too many competitors, which dilutes adoption and liquidity for Polygon's ecosystem. While Polygon PoS isn't a direct competitor to most Layer 2 rollups and monolithic "Ethereum killers" because it is designed from ground up to be Ethereum sidechain, it does experience indirect competition. And the other Polygon Layer 2 rollup projects are direct competitors. As of Jan 2021, Polygon Hermez is only in [17th place in TLV](https://l2beat.com/). > > **Less resistant to DDoS attacks** > > Like all networks with low transaction fees, it at risk to DDoS attacks since the barrier to making transactions is low > > In early Jan 2022, [Sunflowers Farm \(SFF\) unintentionally DDoS-attacked the Polygon PoS network](https://www.coindesk.com/tech/2022/01/06/polygon-under-accidental-attack-from-swarm-of-sunflower-farmers/) and completely congested the network because it was more profitable to play the game and spam transactions than pay network fees. Transaction fees shot up 20x. Eventually, a hacker exploited the SFF game and reduced its price to zero, and users rejoiced because it cleared the congestion. > > **Centralized governance of the PoS chain** > > Governance is currently centralized. > > The Polygon team single-handedly [increased the transaction fee from 1 to 30 Gwei in Oct 2021](https://thedefiant.io/polygon-transaction-fee-hike/) to combat spammers. They didn't communicate this with the community or ask for feedback ahead of time. > > The Polygon team also [secretly hard-forked the network](https://cryptobriefing.com/a-hacker-stole-1-6m-after-exploiting-a-polygon-bug/) by pushing out a patch 1 day after a hacker stole $1.6M from the network from the Polygon PoS genesis contract in Dec 2021. The team didn't publicize the reason for the emergency patch until over 3 weeks later. > > They have only very recently starting looking to decentralize governance through a [Polygon Ecosystem DAO](https://blog.polygon.technology/state-of-governance-decentralization/), but that could be a long time away. > > Also, the top 4 staking validators out of a total of 100 validators [own 49% of the supply](https://wallet.polygon.technology/staking/) of MATIC, but the staking validators are only used for validation and [block production](https://forum.matic.network/t/matic-system-overview-bor/126), not governance. > > **Split attention on multiple projects** > > For better or worse, Polygon is working on multiple Layer 2 solutions (Polygon PoS, Hermez, Zero, Miden, Nightfall, Avail) and constantly researching different protocols. This is a rather Google-like decision to have multiple competiting products where it becomes the Jack-of-all-trades, Master-of-none. Some of these protocols are really exciting, but the crypto community doesn't know about them because there are too many to focus on. > > **Tokenomics of MATIC Tokens** > > The MATIC token has limited utility. It's used for staking (validation and block production). Once the pool of staking rewards runs out of funds, all staking rewards will need to come from transaction fees, which are tiny. Currently only 75% of the coins are in circulation, and the Polygon Team has an ongoing [token release schedule](https://research.binance.com/en/projects/matic-network) for dumping tokens on the open market. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yk4/coin_inquiries_round_polygon_conarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Polygon Pro-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **PROs** > > **Much faster and cheaper to use than Layer 1 Ethereum** > > The main benefit of using the Polygon PoS network is that it's an Ethereum side chain that provides faster and cheapers transactions for Ethereum tokens. It can process 1K-10K TPS with a [2-second average block time](https://polygonscan.com/chart/blocktime), which also has deterministic finality. The base fee is only 30 Gwei, and the total transaction fees hovers between [$0.1 to $0.5 USD](https://polygonscan.com/chart/transactionfee) (~4M transactions, ~30k total MATIC fees per day). > > This is also much cheaper than [optimistic rollups](https://l2fees.info/). > > **Largest Layer 2 network adoption** > > Among all the Layer 2 Ethereum solutions, Polygon PoS is completely ahead of every other competitor in terms total locked value with a [$4.8B USD market cap](https://defillama.com/chain/Polygon) (Jan 2021), compared to [$5.4 USD **Combined** Total Locked Value (TLV)](https://l2beat.com/) for the next 10 largest Layer 2 rollup solutions. Note that this does not include the $12B market cap of the MATIC token since that's a coin/token on multiple networks. DeFi support for Polygon is massive. > > One of the main issues with Layer 2 is that most are currently walled gardens with lackluster CEX/CeFi support for on/offramps. After all, the main benefit of lower fees on Layer 2 is lost if you can't on/offramp directly. Polygon is also ahead of competition here with support from Crypto_dot_com, Nexo, Binance (international), and Kucoin. Celsius Network will also have support mid-February. > > Polygon PoS is the only other large network besides Ethereum currently [https://support.opensea.io/hc/en-us/articles/4404027708051-Which-blockchains-does-OpenSea-support-](supported on OpenSea). > > **Weak competition** > > There are so many Ethereum Layer 2 competitors, but nearly all of them are rollups. Polygon PoS works differently in that it's a separate network where the state of the network is stored on Ethereum every 256 blocks. Thus, it doesn't directly compete with them. > > In addition, it also doesn't compete directly with Ethereum killers (ALGO, SOL, ETH, ADA, EGLD, etc.) in that it's designed as a side chain specifically for Ethereum. It shares popularity and as Ethereum grows. > > **Shares Ethereum developer tools** > > Polygon and Ethereum share similar EVM development tools (including Solidity and Vyper), so it's easy for Ethereum's large number of devs to develop for Polygon. > > Many Layer 2 rollups have yet to roll out EVM support while Polygon PoS is already battle-tested. > > **Abundance of research** > > For better or worse, Polygon is working on multiple Layer 2 solutions and constantly researching different protocols. Polygon Zero in particular provides [extremely-fast ZK proofs](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/), and its technology might become the future leader for ZK rollups. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yjj/coin_inquiries_round_polygon_proarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds.

jakekick1999

Finally we are seeing the ZK Rollups solution from Polygon. A lot of people misunderstood that MATIC was actually a L2. It wasn't. it was just a side chain. Now with ZK Rollups, with the coming ETH2.0 Merge, MATIC will be crucial in keeping the fees low.

Pill_Murray_

19,000 dapps, numerous ZK rollups, and Facebook & IG Incorporating it to run NFTs... I'm betting my money on yes

CointestAdmin

#Polygon Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **CONs** > > **Still requires the Ethereum network** > > The Polygon PoS network is a side chain for Ethereum. It has its own network security, but staking is still done on the Ethereum network and requires paying expensive Ethereum smart contract gas fees. > > Similarly, going from Layer 1 Ethereum to Polygon is mainly done through the Polygon PoS bridge, which also costs expensive Ethereum gas fees. (This will gradually phase out as more CEXs provide direct onramp to the Polygon PoS network.) > > **Has plenty of competitors** > > There are just too many competitors, which dilutes adoption and liquidity for Polygon's ecosystem. While Polygon PoS isn't a direct competitor to most Layer 2 rollups and monolithic "Ethereum killers" because it is designed from ground up to be Ethereum sidechain, it does experience indirect competition. And the other Polygon Layer 2 rollup projects are direct competitors. As of Jan 2021, Polygon Hermez is only in [17th place in TLV](https://l2beat.com/). > > **Less resistant to DDoS attacks** > > Like all networks with low transaction fees, it at risk to DDoS attacks since the barrier to making transactions is low > > In early Jan 2022, [Sunflowers Farm \(SFF\) unintentionally DDoS-attacked the Polygon PoS network](https://www.coindesk.com/tech/2022/01/06/polygon-under-accidental-attack-from-swarm-of-sunflower-farmers/) and completely congested the network because it was more profitable to play the game and spam transactions than pay network fees. Transaction fees shot up 20x. Eventually, a hacker exploited the SFF game and reduced its price to zero, and users rejoiced because it cleared the congestion. > > **Centralized governance of the PoS chain** > > Governance is currently centralized. > > The Polygon team single-handedly [increased the transaction fee from 1 to 30 Gwei in Oct 2021](https://thedefiant.io/polygon-transaction-fee-hike/) to combat spammers. They didn't communicate this with the community or ask for feedback ahead of time. > > The Polygon team also [secretly hard-forked the network](https://cryptobriefing.com/a-hacker-stole-1-6m-after-exploiting-a-polygon-bug/) by pushing out a patch 1 day after a hacker stole $1.6M from the network from the Polygon PoS genesis contract in Dec 2021. The team didn't publicize the reason for the emergency patch until over 3 weeks later. > > They have only very recently starting looking to decentralize governance through a [Polygon Ecosystem DAO](https://blog.polygon.technology/state-of-governance-decentralization/), but that could be a long time away. > > Also, the top 4 staking validators out of a total of 100 validators [own 49% of the supply](https://wallet.polygon.technology/staking/) of MATIC, but the staking validators are only used for validation and [block production](https://forum.matic.network/t/matic-system-overview-bor/126), not governance. > > **Split attention on multiple projects** > > For better or worse, Polygon is working on multiple Layer 2 solutions (Polygon PoS, Hermez, Zero, Miden, Nightfall, Avail) and constantly researching different protocols. This is a rather Google-like decision to have multiple competiting products where it becomes the Jack-of-all-trades, Master-of-none. Some of these protocols are really exciting, but the crypto community doesn't know about them because there are too many to focus on. > > **Tokenomics of MATIC Tokens** > > The MATIC token has limited utility. It's used for staking (validation and block production). Once the pool of staking rewards runs out of funds, all staking rewards will need to come from transaction fees, which are tiny. Currently only 75% of the coins are in circulation, and the Polygon Team has an ongoing [token release schedule](https://research.binance.com/en/projects/matic-network) for dumping tokens on the open market. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yk4/coin_inquiries_round_polygon_conarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

Thediamondhandedlad

Im actually really excited for this bear market, time for me to start loading up big time on ZK layer 2 roll ups like loopring

Mike941

A lot of amazing stuff is going to happen on Cardano over the summer after the June hard fork. ZK rollups, more smart contract TPS than ETH and Djed just to name a few.

CointestAdmin

#Polygon Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **CONs** > > **Still requires the Ethereum network** > > The Polygon PoS network is a side chain for Ethereum. It has its own network security, but staking is still done on the Ethereum network and requires paying expensive Ethereum smart contract gas fees. > > Similarly, going from Layer 1 Ethereum to Polygon is mainly done through the Polygon PoS bridge, which also costs expensive Ethereum gas fees. (This will gradually phase out as more CEXs provide direct onramp to the Polygon PoS network.) > > **Has plenty of competitors** > > There are just too many competitors, which dilutes adoption and liquidity for Polygon's ecosystem. While Polygon PoS isn't a direct competitor to most Layer 2 rollups and monolithic "Ethereum killers" because it is designed from ground up to be Ethereum sidechain, it does experience indirect competition. And the other Polygon Layer 2 rollup projects are direct competitors. As of Jan 2021, Polygon Hermez is only in [17th place in TLV](https://l2beat.com/). > > **Less resistant to DDoS attacks** > > Like all networks with low transaction fees, it at risk to DDoS attacks since the barrier to making transactions is low > > In early Jan 2022, [Sunflowers Farm \(SFF\) unintentionally DDoS-attacked the Polygon PoS network](https://www.coindesk.com/tech/2022/01/06/polygon-under-accidental-attack-from-swarm-of-sunflower-farmers/) and completely congested the network because it was more profitable to play the game and spam transactions than pay network fees. Transaction fees shot up 20x. Eventually, a hacker exploited the SFF game and reduced its price to zero, and users rejoiced because it cleared the congestion. > > **Centralized governance of the PoS chain** > > Governance is currently centralized. > > The Polygon team single-handedly [increased the transaction fee from 1 to 30 Gwei in Oct 2021](https://thedefiant.io/polygon-transaction-fee-hike/) to combat spammers. They didn't communicate this with the community or ask for feedback ahead of time. > > The Polygon team also [secretly hard-forked the network](https://cryptobriefing.com/a-hacker-stole-1-6m-after-exploiting-a-polygon-bug/) by pushing out a patch 1 day after a hacker stole $1.6M from the network from the Polygon PoS genesis contract in Dec 2021. The team didn't publicize the reason for the emergency patch until over 3 weeks later. > > They have only very recently starting looking to decentralize governance through a [Polygon Ecosystem DAO](https://blog.polygon.technology/state-of-governance-decentralization/), but that could be a long time away. > > Also, the top 4 staking validators out of a total of 100 validators [own 49% of the supply](https://wallet.polygon.technology/staking/) of MATIC, but the staking validators are only used for validation and [block production](https://forum.matic.network/t/matic-system-overview-bor/126), not governance. > > **Split attention on multiple projects** > > For better or worse, Polygon is working on multiple Layer 2 solutions (Polygon PoS, Hermez, Zero, Miden, Nightfall, Avail) and constantly researching different protocols. This is a rather Google-like decision to have multiple competiting products where it becomes the Jack-of-all-trades, Master-of-none. Some of these protocols are really exciting, but the crypto community doesn't know about them because there are too many to focus on. > > **Tokenomics of MATIC Tokens** > > The MATIC token has limited utility. It's used for staking (validation and block production). Once the pool of staking rewards runs out of funds, all staking rewards will need to come from transaction fees, which are tiny. Currently only 75% of the coins are in circulation, and the Polygon Team has an ongoing [token release schedule](https://research.binance.com/en/projects/matic-network) for dumping tokens on the open market. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yk4/coin_inquiries_round_polygon_conarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Polygon Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **CONs** > > **Still requires the Ethereum network** > > The Polygon PoS network is a side chain for Ethereum. It has its own network security, but staking is still done on the Ethereum network and requires paying expensive Ethereum smart contract gas fees. > > Similarly, going from Layer 1 Ethereum to Polygon is mainly done through the Polygon PoS bridge, which also costs expensive Ethereum gas fees. (This will gradually phase out as more CEXs provide direct onramp to the Polygon PoS network.) > > **Has plenty of competitors** > > There are just too many competitors, which dilutes adoption and liquidity for Polygon's ecosystem. While Polygon PoS isn't a direct competitor to most Layer 2 rollups and monolithic "Ethereum killers" because it is designed from ground up to be Ethereum sidechain, it does experience indirect competition. And the other Polygon Layer 2 rollup projects are direct competitors. As of Jan 2021, Polygon Hermez is only in [17th place in TLV](https://l2beat.com/). > > **Less resistant to DDoS attacks** > > Like all networks with low transaction fees, it at risk to DDoS attacks since the barrier to making transactions is low > > In early Jan 2022, [Sunflowers Farm \(SFF\) unintentionally DDoS-attacked the Polygon PoS network](https://www.coindesk.com/tech/2022/01/06/polygon-under-accidental-attack-from-swarm-of-sunflower-farmers/) and completely congested the network because it was more profitable to play the game and spam transactions than pay network fees. Transaction fees shot up 20x. Eventually, a hacker exploited the SFF game and reduced its price to zero, and users rejoiced because it cleared the congestion. > > **Centralized governance of the PoS chain** > > Governance is currently centralized. > > The Polygon team single-handedly [increased the transaction fee from 1 to 30 Gwei in Oct 2021](https://thedefiant.io/polygon-transaction-fee-hike/) to combat spammers. They didn't communicate this with the community or ask for feedback ahead of time. > > The Polygon team also [secretly hard-forked the network](https://cryptobriefing.com/a-hacker-stole-1-6m-after-exploiting-a-polygon-bug/) by pushing out a patch 1 day after a hacker stole $1.6M from the network from the Polygon PoS genesis contract in Dec 2021. The team didn't publicize the reason for the emergency patch until over 3 weeks later. > > They have only very recently starting looking to decentralize governance through a [Polygon Ecosystem DAO](https://blog.polygon.technology/state-of-governance-decentralization/), but that could be a long time away. > > Also, the top 4 staking validators out of a total of 100 validators [own 49% of the supply](https://wallet.polygon.technology/staking/) of MATIC, but the staking validators are only used for validation and [block production](https://forum.matic.network/t/matic-system-overview-bor/126), not governance. > > **Split attention on multiple projects** > > For better or worse, Polygon is working on multiple Layer 2 solutions (Polygon PoS, Hermez, Zero, Miden, Nightfall, Avail) and constantly researching different protocols. This is a rather Google-like decision to have multiple competiting products where it becomes the Jack-of-all-trades, Master-of-none. Some of these protocols are really exciting, but the crypto community doesn't know about them because there are too many to focus on. > > **Tokenomics of MATIC Tokens** > > The MATIC token has limited utility. It's used for staking (validation and block production). Once the pool of staking rewards runs out of funds, all staking rewards will need to come from transaction fees, which are tiny. Currently only 75% of the coins are in circulation, and the Polygon Team has an ongoing [token release schedule](https://research.binance.com/en/projects/matic-network) for dumping tokens on the open market. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yk4/coin_inquiries_round_polygon_conarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Polygon Pro-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **PROs** > > **Much faster and cheaper to use than Layer 1 Ethereum** > > The main benefit of using the Polygon PoS network is that it's an Ethereum side chain that provides faster and cheapers transactions for Ethereum tokens. It can process 1K-10K TPS with a [2-second average block time](https://polygonscan.com/chart/blocktime), which also has deterministic finality. The base fee is only 30 Gwei, and the total transaction fees hovers between [$0.1 to $0.5 USD](https://polygonscan.com/chart/transactionfee) (~4M transactions, ~30k total MATIC fees per day). > > This is also much cheaper than [optimistic rollups](https://l2fees.info/). > > **Largest Layer 2 network adoption** > > Among all the Layer 2 Ethereum solutions, Polygon PoS is completely ahead of every other competitor in terms total locked value with a [$4.8B USD market cap](https://defillama.com/chain/Polygon) (Jan 2021), compared to [$5.4 USD **Combined** Total Locked Value (TLV)](https://l2beat.com/) for the next 10 largest Layer 2 rollup solutions. Note that this does not include the $12B market cap of the MATIC token since that's a coin/token on multiple networks. DeFi support for Polygon is massive. > > One of the main issues with Layer 2 is that most are currently walled gardens with lackluster CEX/CeFi support for on/offramps. After all, the main benefit of lower fees on Layer 2 is lost if you can't on/offramp directly. Polygon is also ahead of competition here with support from Crypto_dot_com, Nexo, Binance (international), and Kucoin. Celsius Network will also have support mid-February. > > Polygon PoS is the only other large network besides Ethereum currently [https://support.opensea.io/hc/en-us/articles/4404027708051-Which-blockchains-does-OpenSea-support-](supported on OpenSea). > > **Weak competition** > > There are so many Ethereum Layer 2 competitors, but nearly all of them are rollups. Polygon PoS works differently in that it's a separate network where the state of the network is stored on Ethereum every 256 blocks. Thus, it doesn't directly compete with them. > > In addition, it also doesn't compete directly with Ethereum killers (ALGO, SOL, ETH, ADA, EGLD, etc.) in that it's designed as a side chain specifically for Ethereum. It shares popularity and as Ethereum grows. > > **Shares Ethereum developer tools** > > Polygon and Ethereum share similar EVM development tools (including Solidity and Vyper), so it's easy for Ethereum's large number of devs to develop for Polygon. > > Many Layer 2 rollups have yet to roll out EVM support while Polygon PoS is already battle-tested. > > **Abundance of research** > > For better or worse, Polygon is working on multiple Layer 2 solutions and constantly researching different protocols. Polygon Zero in particular provides [extremely-fast ZK proofs](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/), and its technology might become the future leader for ZK rollups. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yjj/coin_inquiries_round_polygon_proarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds.

CointestAdmin

#Polygon Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **CONs** > > **Still requires the Ethereum network** > > The Polygon PoS network is a side chain for Ethereum. It has its own network security, but staking is still done on the Ethereum network and requires paying expensive Ethereum smart contract gas fees. > > Similarly, going from Layer 1 Ethereum to Polygon is mainly done through the Polygon PoS bridge, which also costs expensive Ethereum gas fees. (This will gradually phase out as more CEXs provide direct onramp to the Polygon PoS network.) > > **Has plenty of competitors** > > There are just too many competitors, which dilutes adoption and liquidity for Polygon's ecosystem. While Polygon PoS isn't a direct competitor to most Layer 2 rollups and monolithic "Ethereum killers" because it is designed from ground up to be Ethereum sidechain, it does experience indirect competition. And the other Polygon Layer 2 rollup projects are direct competitors. As of Jan 2021, Polygon Hermez is only in [17th place in TLV](https://l2beat.com/). > > **Less resistant to DDoS attacks** > > Like all networks with low transaction fees, it at risk to DDoS attacks since the barrier to making transactions is low > > In early Jan 2022, [Sunflowers Farm \(SFF\) unintentionally DDoS-attacked the Polygon PoS network](https://www.coindesk.com/tech/2022/01/06/polygon-under-accidental-attack-from-swarm-of-sunflower-farmers/) and completely congested the network because it was more profitable to play the game and spam transactions than pay network fees. Transaction fees shot up 20x. Eventually, a hacker exploited the SFF game and reduced its price to zero, and users rejoiced because it cleared the congestion. > > **Centralized governance of the PoS chain** > > Governance is currently centralized. > > The Polygon team single-handedly [increased the transaction fee from 1 to 30 Gwei in Oct 2021](https://thedefiant.io/polygon-transaction-fee-hike/) to combat spammers. They didn't communicate this with the community or ask for feedback ahead of time. > > The Polygon team also [secretly hard-forked the network](https://cryptobriefing.com/a-hacker-stole-1-6m-after-exploiting-a-polygon-bug/) by pushing out a patch 1 day after a hacker stole $1.6M from the network from the Polygon PoS genesis contract in Dec 2021. The team didn't publicize the reason for the emergency patch until over 3 weeks later. > > They have only very recently starting looking to decentralize governance through a [Polygon Ecosystem DAO](https://blog.polygon.technology/state-of-governance-decentralization/), but that could be a long time away. > > Also, the top 4 staking validators out of a total of 100 validators [own 49% of the supply](https://wallet.polygon.technology/staking/) of MATIC, but the staking validators are only used for validation and [block production](https://forum.matic.network/t/matic-system-overview-bor/126), not governance. > > **Split attention on multiple projects** > > For better or worse, Polygon is working on multiple Layer 2 solutions (Polygon PoS, Hermez, Zero, Miden, Nightfall, Avail) and constantly researching different protocols. This is a rather Google-like decision to have multiple competiting products where it becomes the Jack-of-all-trades, Master-of-none. Some of these protocols are really exciting, but the crypto community doesn't know about them because there are too many to focus on. > > **Tokenomics of MATIC Tokens** > > The MATIC token has limited utility. It's used for staking (validation and block production). Once the pool of staking rewards runs out of funds, all staking rewards will need to come from transaction fees, which are tiny. Currently only 75% of the coins are in circulation, and the Polygon Team has an ongoing [token release schedule](https://research.binance.com/en/projects/matic-network) for dumping tokens on the open market. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yk4/coin_inquiries_round_polygon_conarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

CointestAdmin

#Polygon Pro-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **PROs** > > **Much faster and cheaper to use than Layer 1 Ethereum** > > The main benefit of using the Polygon PoS network is that it's an Ethereum side chain that provides faster and cheapers transactions for Ethereum tokens. It can process 1K-10K TPS with a [2-second average block time](https://polygonscan.com/chart/blocktime), which also has deterministic finality. The base fee is only 30 Gwei, and the total transaction fees hovers between [$0.1 to $0.5 USD](https://polygonscan.com/chart/transactionfee) (~4M transactions, ~30k total MATIC fees per day). > > This is also much cheaper than [optimistic rollups](https://l2fees.info/). > > **Largest Layer 2 network adoption** > > Among all the Layer 2 Ethereum solutions, Polygon PoS is completely ahead of every other competitor in terms total locked value with a [$4.8B USD market cap](https://defillama.com/chain/Polygon) (Jan 2021), compared to [$5.4 USD **Combined** Total Locked Value (TLV)](https://l2beat.com/) for the next 10 largest Layer 2 rollup solutions. Note that this does not include the $12B market cap of the MATIC token since that's a coin/token on multiple networks. DeFi support for Polygon is massive. > > One of the main issues with Layer 2 is that most are currently walled gardens with lackluster CEX/CeFi support for on/offramps. After all, the main benefit of lower fees on Layer 2 is lost if you can't on/offramp directly. Polygon is also ahead of competition here with support from Crypto_dot_com, Nexo, Binance (international), and Kucoin. Celsius Network will also have support mid-February. > > Polygon PoS is the only other large network besides Ethereum currently [https://support.opensea.io/hc/en-us/articles/4404027708051-Which-blockchains-does-OpenSea-support-](supported on OpenSea). > > **Weak competition** > > There are so many Ethereum Layer 2 competitors, but nearly all of them are rollups. Polygon PoS works differently in that it's a separate network where the state of the network is stored on Ethereum every 256 blocks. Thus, it doesn't directly compete with them. > > In addition, it also doesn't compete directly with Ethereum killers (ALGO, SOL, ETH, ADA, EGLD, etc.) in that it's designed as a side chain specifically for Ethereum. It shares popularity and as Ethereum grows. > > **Shares Ethereum developer tools** > > Polygon and Ethereum share similar EVM development tools (including Solidity and Vyper), so it's easy for Ethereum's large number of devs to develop for Polygon. > > Many Layer 2 rollups have yet to roll out EVM support while Polygon PoS is already battle-tested. > > **Abundance of research** > > For better or worse, Polygon is working on multiple Layer 2 solutions and constantly researching different protocols. Polygon Zero in particular provides [extremely-fast ZK proofs](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/), and its technology might become the future leader for ZK rollups. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yjj/coin_inquiries_round_polygon_proarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds.

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Papazio

No worries! The 64 is probably referring to sharding in the future, that’s probably a year off or more and yes L2s will still be needed. Ethereum is aiming to serve the world with the L1 as the most secure settlement layer, no L1 can scale to do that _and_ remain decentralised. A modular approach is the only method where L2s pay the L1 for security but do the computation themselves and post proofs to L1. ETH L1 fees are projected to stay high because the blockspace will be in demand from users as well as L2s taking an increasing share. Polygon does actually post data in a checkpointing manner to ETH L1. So while it is not a L2, it does use Ethereum for some security and is better than a whole side chain set up. It is and was very much needed on the scaling journey and Polygon the company has lots of other scaling solutions en route such as ZK rollups.

masixx

Where money can be made, money will be made. Unfortunately in a bull market this always means many scams. But not everything is a scam. You mentioned NFTs. But don't forget we also got DEX. And understand that a limiting factor of real world application is TX throughput. Since 2017 MANY things have improved in the backend. Move to PoS will free resources for actual processing power. ZK rollups enable secure L2 scaling solutions without traditional downsides. Oracles have become more mature. Ppl start figuring out what needs to be on chain and what doesn't. The more good example projects exist the easier to check how others do things and adopt. If you remember the internet of 2020 you might recall back then we had no real standards. There was only a hand full of REALLY good websites using proprietary tech. It took decades to come to the point of HTML5 and even longer for a big part of the internet to actually use it. Currently we're in the era of pre HTML5. Ppl still try to figure out how to do things. Stuff constantly changes. I'd guess it will take at least another 5 years until we see our HTML5. Until then you'll see more stuff like NFTs which currently only exist to make money.

RedEagle_MGN

I mean everything on a blockchain is validated by every other node on the chain. This means all that validation needs to use ZK proofs for the chain to remain private right?

aggrometal

Can you explain Briq to me? I played with the brick crafting but I don't really understand what the benefit of creating the NFTs would be. It is on Starknet also, how does ZK come into this?

Aaronus23b

Here's a VERY VERY SIMPLIFIED explainer, answering your questions in order How they work: Imagine you have houses with two doors at the front and one at the back but only one of the doors at the front works (these houses will represent any secret, basically a txn) then you say "I know to go from the front to the back from any of these houses" the "verifier simply waits at the back door and sees you come out (of course you could've faked it, just guessing a door and getting it right, but if you do the test enough times it will be evident that you actally know how to get out since guessing right 50x times in a row is near impossible), you may repeat this proof any number of times without the prover gaining knowledge about the secret itself (this is what makes it zero knoledge he transaction data (who is sending what to who, how much is in each wallet, who requested the info and who verified it), is that all private or is the meta data still exposed?: Depends on implementation details of the particular protocol, however any observer can execute a non-interactive zk proof, I.E you dont need to store a verifier you need to store the "answers from them" and you may verifiy the proof is correct from the chain itself, if you cannot do this I would be wary of the protocol since an answer from a specific verifier is not decentralized If the above is the case, why isn't ZK used in all cases on all blockchains? Most of the security of blockchains come from their transparency (how do we know how much money this wallet has? just check the chain) so obscuring the chain in a way that can provide suitable anonimity and still leave it usable is absolutely not an easy feat (many many 'basic' things in the chain need to change), to see how a good approach as to how this is done you can look at monero. Is all the validation or just the info sent to companies private? depends on implementation details Would not the 20x number of calculations needed for ZK for everything cause HUGE efficiency problems? check out monero, it has been done (and there is obviously work ahead but its abosolutely a usable private coin)

RedEagle_MGN

I’m more curious about its application than how it functions to be honest. What I’m curious about is how it’s used in practice in a private Blockchain. Namely, I want to know if this is only when you’re seeking to give your data out outside of the chain or if everything within the chain is validated using ZK proofs

Aaronus23b

ZK proofs are math from like the 90s are you high?

tipsoutforharambe

No. It’s current main chain will likely decay a bit but they were smart and invested in a lot of roll up and ZK protocols when they caught their big run Jan-April 21. Their end goal is to be an interoperable set of L2s that all run on Matic token.

CointestAdmin

#Polygon Pro-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **PROs** > > **Much faster and cheaper to use than Layer 1 Ethereum** > > The main benefit of using the Polygon PoS network is that it's an Ethereum side chain that provides faster and cheapers transactions for Ethereum tokens. It can process 1K-10K TPS with a [2-second average block time](https://polygonscan.com/chart/blocktime), which also has deterministic finality. The base fee is only 30 Gwei, and the total transaction fees hovers between [$0.1 to $0.5 USD](https://polygonscan.com/chart/transactionfee) (~4M transactions, ~30k total MATIC fees per day). > > This is also much cheaper than [optimistic rollups](https://l2fees.info/). > > **Largest Layer 2 network adoption** > > Among all the Layer 2 Ethereum solutions, Polygon PoS is completely ahead of every other competitor in terms total locked value with a [$4.8B USD market cap](https://defillama.com/chain/Polygon) (Jan 2021), compared to [$5.4 USD **Combined** Total Locked Value (TLV)](https://l2beat.com/) for the next 10 largest Layer 2 rollup solutions. Note that this does not include the $12B market cap of the MATIC token since that's a coin/token on multiple networks. DeFi support for Polygon is massive. > > One of the main issues with Layer 2 is that most are currently walled gardens with lackluster CEX/CeFi support for on/offramps. After all, the main benefit of lower fees on Layer 2 is lost if you can't on/offramp directly. Polygon is also ahead of competition here with support from Crypto_dot_com, Nexo, Binance (international), and Kucoin. Celsius Network will also have support mid-February. > > Polygon PoS is the only other large network besides Ethereum currently [https://support.opensea.io/hc/en-us/articles/4404027708051-Which-blockchains-does-OpenSea-support-](supported on OpenSea). > > **Weak competition** > > There are so many Ethereum Layer 2 competitors, but nearly all of them are rollups. Polygon PoS works differently in that it's a separate network where the state of the network is stored on Ethereum every 256 blocks. Thus, it doesn't directly compete with them. > > In addition, it also doesn't compete directly with Ethereum killers (ALGO, SOL, ETH, ADA, EGLD, etc.) in that it's designed as a side chain specifically for Ethereum. It shares popularity and as Ethereum grows. > > **Shares Ethereum developer tools** > > Polygon and Ethereum share similar EVM development tools (including Solidity and Vyper), so it's easy for Ethereum's large number of devs to develop for Polygon. > > Many Layer 2 rollups have yet to roll out EVM support while Polygon PoS is already battle-tested. > > **Abundance of research** > > For better or worse, Polygon is working on multiple Layer 2 solutions and constantly researching different protocols. Polygon Zero in particular provides [extremely-fast ZK proofs](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/), and its technology might become the future leader for ZK rollups. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yjj/coin_inquiries_round_polygon_proarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds.

CointestAdmin

#Polygon Pro-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **PROs** > > **Much faster and cheaper to use than Layer 1 Ethereum** > > The main benefit of using the Polygon PoS network is that it's an Ethereum side chain that provides faster and cheapers transactions for Ethereum tokens. It can process 1K-10K TPS with a [2-second average block time](https://polygonscan.com/chart/blocktime), which also has deterministic finality. The base fee is only 30 Gwei, and the total transaction fees hovers between [$0.1 to $0.5 USD](https://polygonscan.com/chart/transactionfee) (~4M transactions, ~30k total MATIC fees per day). > > This is also much cheaper than [optimistic rollups](https://l2fees.info/). > > **Largest Layer 2 network adoption** > > Among all the Layer 2 Ethereum solutions, Polygon PoS is completely ahead of every other competitor in terms total locked value with a [$4.8B USD market cap](https://defillama.com/chain/Polygon) (Jan 2021), compared to [$5.4 USD **Combined** Total Locked Value (TLV)](https://l2beat.com/) for the next 10 largest Layer 2 rollup solutions. Note that this does not include the $12B market cap of the MATIC token since that's a coin/token on multiple networks. DeFi support for Polygon is massive. > > One of the main issues with Layer 2 is that most are currently walled gardens with lackluster CEX/CeFi support for on/offramps. After all, the main benefit of lower fees on Layer 2 is lost if you can't on/offramp directly. Polygon is also ahead of competition here with support from Crypto_dot_com, Nexo, Binance (international), and Kucoin. Celsius Network will also have support mid-February. > > Polygon PoS is the only other large network besides Ethereum currently [https://support.opensea.io/hc/en-us/articles/4404027708051-Which-blockchains-does-OpenSea-support-](supported on OpenSea). > > **Weak competition** > > There are so many Ethereum Layer 2 competitors, but nearly all of them are rollups. Polygon PoS works differently in that it's a separate network where the state of the network is stored on Ethereum every 256 blocks. Thus, it doesn't directly compete with them. > > In addition, it also doesn't compete directly with Ethereum killers (ALGO, SOL, ETH, ADA, EGLD, etc.) in that it's designed as a side chain specifically for Ethereum. It shares popularity and as Ethereum grows. > > **Shares Ethereum developer tools** > > Polygon and Ethereum share similar EVM development tools (including Solidity and Vyper), so it's easy for Ethereum's large number of devs to develop for Polygon. > > Many Layer 2 rollups have yet to roll out EVM support while Polygon PoS is already battle-tested. > > **Abundance of research** > > For better or worse, Polygon is working on multiple Layer 2 solutions and constantly researching different protocols. Polygon Zero in particular provides [extremely-fast ZK proofs](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/), and its technology might become the future leader for ZK rollups. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yjj/coin_inquiries_round_polygon_proarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds.

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

TheMetalMatt

No prob, happy to answer. > So does that mean that eventually "all" transactions on the eth network will migrate over to L2 and L1 will be exclusively used to consolidate L2? Yes, basically. It will be cheaper to transact on L2 for just about anything, so L1 will be used as the security/settlement layer since it is an established and secure network. > That would mean the growth of L2 grows L1 and L2 will only become cheap once it saturates L1 with enough transactions to cover/dilute the L1 fees. > But aren't the number of possible transactions per block on L1 capped, so that would mean the fees can only get as low as the allowable number of transactions per block. You have that part backwards- as L2 grows, a larger number of transactions will be rolled into each settlement block, and fees on L2 will go down. The way these work on zero-knowledge L2s (the only type of L2 worth using, imo) is that the L2 submits cryptographic proof of a valid transaction state of their data to Ethereum, which uses math wizardry created by people far smarter than myself to prove to Ethereum L1 that the L2 transaction state is valid. This way, the L2 is just as secure as L1, but with higher Tx throughput. L1 is capped at a certain transaction rate, but because the ZK L2 transactions are submitted as a cryptographic proof, the xx,xxx number of L2 transactions per block are submitted as a single "transaction" on L1, which is the submittal of the ZK-proof. As L2 usage increases, fees will go down relative to L1 gas fees. L1 gas fees can theoretically still rise, but as L2 volume increases, it will matter less and less. That, and because transactions will be batched from L2, L1 will necessarily become less congested. Particularly once zkEVM is solved and L2s can run secure smart contracts.

arg_of_contingency

Haskell is a fair criticism since they could have picked another functional programming language (which Solidity is not hence a lot buggy code and hacks). Ergo went for Scala for example which imo was a better choice. What's your problem with UTXO? It scales much better than EVM, which is a major bottleneck due to it's sequential nature. Ergo and Cardano can easily port the same dApps to L2 ZK-rollups that use eUTXO at L2.

arg_of_contingency

>Ethereum has the largest and most active community of developers by a factor of 100, I would estimate. This pool of developers you're bragging about is still a speck in the ocean of the total numbers of developers in the world. So this can change very quickly. >Ethereum chose the most logical solutions for scalability: a lightweight layer 1 PoS system with sharding and excellent layer 2 options for high transaction throughput. And because they have been focused on that goal longer than any other project, they are by far the most reliable, robust and decentralized smart contract platform available. Ethereum still has EVM at L1, which is a major bottleneck due to it's sequential nature. dApps have to be rewritten at L2 because why would L2 solutions keep using the problematic EVM. Meanwhile eUTXO blockchains like Cardano or Ergo can keep the same accounting model at L2 because it's parallelism is suited for scaling solutions like ZK-rollups.

jcm2606

They can be, yes, but it's a bit more nuanced than just "yes, they're more centralised than Ethereum" or "no, they're as decentralised as Ethereum". Tl;dr at the bottom, but there's more details below. Generally speaking, L2s split centralisation up into three distinct vectors: off-chain transaction processing, on-chain transaction submission, and on-chain transaction settlement. Quick primer, just in case you don't know what these terms mean and/or don't know how L2s work: L2s basically work by processing transactions off the L1 chain, packing them together into a single batch, and submitting this batch on-chain, where the batch is settled on-chain via a set of smart contracts. *Anyways*, these three stages can have different degrees of centralisation. Generally speaking, the first two stages (processing & submission) will be linked and have the same degree of centralisation, but there *are* networks that have measures in place to try to decentralise one, even though the other is highly or even fully centralised (I'll talk about an example in a bit). The last stage (settlement) is always going to have a different degree of centralisation, and is the one that will typically always be truly decentralised, for reasons I'll go into later. So, first is processing. L2s *are* their own separate networks, and so they typically have their own blockchain or some form of ledger, that is advanced outside of the L1 network. This is where processing takes place, and, generally speaking, this has similar degrees of centralisation to other L1 networks. Some L2s may have a lot of validators and nodes, other L2s may only have a few. Depending on how many validators there are, it may be possible for an L2 to censor you (that is, ignore any of your transactions) if all validators wish to do so, *but* some L2s (mainly Arbitrum) have mechanisms in place to try to prevent this from happening, by having some honest validators be able to watch a transaction inbox on the L1 side and raise a flag or force your transaction inbox through, if it isn't being processed by the L2 network in a timely fashion. Next is submission. L2s need to get their state (balances of all users and contracts) onto the L1 network somehow, and this is the role of the submission stage. To my knowledge, there are currently two different approaches of handling submission: have a single sequencer node (a type of node responsible for submitting batches of transactions to the L1 network) that has full control over the submission process, and have a set of sequencers that works similarly to PoS, with each sequencer maintaining a stake and either being rewarded for good behaviour, or being slashed/punished for bad behaviour and replaced with another sequencer from the set. Most L2s use the former approach, deploying a fully centralised sequencer that's responsible for all transaction submission to the L1 network (though this sequencer may be subject to the same mechanisms I listed above for processing, where L2 validators watch a transaction inbox on the L1 network and raise a flag or force a transaction through if the sequencer didn't include it in the batch), but some use the latter approach (namely zkSync), where they use a set of sequencers that are managed by a PoS-esque system. Finally, we have settlement. Once the state is on the L1 network, it's recorded within that L1 block and certain data within the L2's smart contracts is updated to reflect the new state. As I said way above, this stage is typically the one that is truly decentralised, as it inherits the security of the L1 network due to the fact that everything's handled by L1 smart contracts. These smart contracts are typically designed to check the validity of the state they're receiving (either by opening up a challenge period in the case of optimistic rollups, where other L1 users can verify the new state and raise a flag if they detect any foul play, or by verifying a zero-knowledge proof (aka a ZKP) that's accompanied the new state in the case of ZK rollups, which is difficult to generate and essentially states that everything within the new state is valid without needing to know the pertinent details, thanks to ~~black magic~~ cryptography), and as such the L1 network is the one that ultimately gives the final seal of approval on everything. There's more things that could be added, like the fact that with ZK rollups in particular, you can actually choose to leave your balance out of the new state, instead relying on the ZKP to have the L1 network acknowledge that the L2 did everything right (your balance is still stored, just off the L1 network, so you'll either need to store it yourself or rely on the L2 to keep it secure and provide it should you choose to move back to the L1 network), but that's basically the gist of the three vectors of centralisation. If I had to sum it all up in a way that's concise (ie in a tl;dr fashion), then it'd have to be that while an L2 can censor you and prevent you from transacting within it, it cannot steal your funds, it cannot lose your funds (should the L2 network go down and all data within the L2 network be erased), and, provided the necessary mechanisms are in place, it cannot prevent you from forcefully pulling your funds out from the L1 side.

CointestAdmin

#Ethereum Con-Arguments Below is an argument written by roberthonker which won 2nd place in the Ethereum Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Taken from u\/maleficent_plankton's submission from last round** > > **Gas Fees**: > > The biggest issues for Ethereum are its network gas fees. Every transaction needs gas to pay for storage and processing power, and gas prices vary based on demand. Gas price is very volatile and often changes 2-5x in magnitude within the same day. ERC20 transfers are used for a large percentage of cryptocurrencies, and it's the reason small ERC20 transactions on DeFi platforms under $1000 are impractical. If I wanted to send ERC20 tokens between exchanges, it's often cheaper to trade for XRP, ALGO, or some other microtransaction coin, transfer it using their other coin's native network, and then trade back into the original token. Pretty ridiculous. > > [Typical transaction fees were between $2-10 over the past year](https://etherscan.io/chart/avg-txfee-usd), but they have shot up to $70 on several occasions. It's very common for popular exchanges to set withdrawal fees to a flat $20-50 for ERC20 transfers due to expensive and unpredictable Ethereum network fees. > > And that's just for basic transactions. Anyone who has tried to use more complex smart contracts like moving MATIC from Polygon mainnet back to ETH L1 mainnet during a time of high gas fees in early 2021 probably saw $100-$200 gas fees. Staking MATIC also costs expensive ERC20 gas fees. (So much for MATIC's claim to reduce ETH gas fees.) > > **Inflation**: > > Ethereum has no supply limit and is still inflationary. It did have [three deflationary days](https://www.theblockcrypto.com/data/on-chain-metrics/ethereum/net-eth-emission-after-eip-1559) in September 2021 after EIP-1557, but it's still net inflationary of ~5K ETH daily. As other competitors join the smart contract space, it's likely we'll see fewer deflationary days in the future. > > **Smart Contract Competition**: > > Ethereum has enjoyed its lead as the smart contract blockchain because it had so few competitors historically. Now we have tons of efficient smart contract competitors like Algorand, Solana, and Cardano. While Ethereum has an enormous lead in smart contract project adoption, it is likely to gradually lose market share to its competitors, which are ahead of it in terms of efficiency and technology. Who wants to pay $20 gas fees when you can get similar transactions for under $0.01 with Algo and Solana or $0.30 transactions with Cardano? This will mainly depend on whether the PoS consensus Ethereum 2.0 can arrive fast enough, and whether it can deliver its claims. For now, we are stuck with PoW Ethereum with almost no adoption for Layer 2. > > **Layer 2 issues**: > > Layer 2 solutions are still extremely early and almost have no adoption. Considering how long it takes exchanges to roll out Layer 2 networks, it'll probably be 6-12 months before I can use any Ethereum Layer 2 solutions on Coinbase. (Polygon network still isn't available on any of the biggest US exchanges after half a year of becoming popular and claiming hundreds of partnerships). The majority of platforms do not currently support Layer 2 rollup networks. Very few fiat onramping/offramping exchanges allow for Optimistic or zk-Rollups. ZK Rollups are very limited in use until they have coordination between exchanges that both support them. > > **L2 - Plasma** has been around since 2017, and I couldn't find anyone still using this state-channel solution. It's [more or less abandoned](https://medium.com/dragonfly-research/the-life-and-death-of-plasma-b72c6a59c5ad) in favor of rollups. I guess some Polygon bridges still use Plasma. It required lots of work and always-online overhead to monitor the side chain for misbehavior. You also need to pay the ERC20 gas fee twice when opening and closing the state channel. It has all the downsides to Lightning, which itself is facing lack of adoption. There is a super long challenge period to exit a side chain via Plasma, which means a 1 week settlement. And a mass exit would complete congest the Ethereum blockchain. > > Both Optimistic and ZK Rollups are handled off-chain and require a separate network nodes or smart contracts as infrastructure to validate transactions or generate ZK Proofs. > > **L2 - Optimistic Rollups are expensive and slow**: > > They settle in [1 week](https://vitalik.ca/general/2021/01/05/rollup.html) because there is a challenge period where anyone can submit a fraud-proof to show if there was an illegitimate transaction. People get anxious over 30-minute finality. How are they going to deal with 1 week settlement? Also, optimistic rollups are inherently insecure by design in order to reduce fees because they outsource validation offchain. The operator can influence transaction ordering. You can have faster withdrawals if you pay a market maker or verifier to jump in and swap your transaction, but why bother with the additional hassle and fees? I don't think the average crypto user will have any use cases for optimistic rollups. Optimistic rollups currently cost [$1-2 on Arbitrum One and Optimism](https://l2fees.info/). Unless you need to use a smart contract (which aren't supported on ZK Rollups), why would anyone anyone want to babysit their transactions for 1 week when ZK Rollups are faster, cheaper, and more secure? > > **L2 - ZK Rollup limitations**: > > ZK Rollup require special infrastructure to generate ZK Proofs. These are very computationally-expensive (potentially [thousands of times](https://vitalik.ca/general/2021/01/05/rollup.html) more expensive that just doing the computation directly). On-chain cost of a ZK Rollup is cheap at about [$0.20 to $.40](https://l2fees.info/), but there is a separate infrastructure cost that is rarely mentioned. Loopring is rolling up its costs into its trading fees, currently 0.80%, so their feeless transfer claims are misleading. For transfers of $10K, that's $80 of fees. In any case, even at $0.40, these are still ~100x more expensive than transferring microtransaction-friendly coins such as XLM, XRP, Nano, etc. FWIW, it's a huge improvement over current Layer 1 costs ... when the platforms I use support them some year in the future. The big limitation is that smart contracts can't use ZK Rollups. > > **Ethereum 2.0 arriving later than competitors**: > > Ethereum is separated into Casper FFG (Friendly Finality Gadget) and Casper CBC (Correct by Construction). Casper FFG is a BFT PoS consensus overlay of PoW based on the GHOST protocol. We don't have much details on Casper CBC since its design is still in progress. Its main purpose is to increase transaction speeds and reduce energy costs while sacrificing decentralization and security. > > The ETH 2.0 Beacon chain, a completely separate blockchain from ETH, won't merge with the main blockchain [until 2022](https://decrypt.co/78690/ethereum-2-staking-tops-21-billion-merge-horizon), giving competitors plenty of time to steal a share of smart contract projects. Even then, Vitalik said that [scaling will still rely on ZK Rollups until the 64-chain sharding phase](https://decrypt.co/34204/ethereum-2-0-will-walk-and-roll-for-two-years-before-it-can-run) arriving later in 2022 or 2023. It'll likely lose some market share to existing alternatives like Algo, Solana, Cardano, and others. > > Unlike Cardano PoS staking, Ethereum 2.0 PoS staking uses slashing. The system cannot tell between being offline or being censored. It's pretty damn scary. > 50% downtime is breakeven (unless there's no prepare + commit). Slash punishment can be very harsh. In the first months, we already had multiple examples of large slashings on the Beacon ETH 2.0 chain caused by simple errors: [Bugs](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) can cause slashing. [Timestamp](https://medium.com/prysmatic-labs/eth2-medalla-testnet-incident-f7fbc3cc934a) being off and cause slashing. QoS and [redundancy mistakes](https://medium.com/stakefish/ethereum-2-0-the-first-slash-a-retrospective-99e4fdcd563a) can cause slashing. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pz4vav/rcc_cointest_top_10_ethereum_conarguments_october/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Ethereum) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

CointestAdmin

#Polygon Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **CONs** > > **Still requires the Ethereum network** > > The Polygon PoS network is a side chain for Ethereum. It has its own network security, but staking is still done on the Ethereum network and requires paying expensive Ethereum smart contract gas fees. > > Similarly, going from Layer 1 Ethereum to Polygon is mainly done through the Polygon PoS bridge, which also costs expensive Ethereum gas fees. (This will gradually phase out as more CEXs provide direct onramp to the Polygon PoS network.) > > **Has plenty of competitors** > > There are just too many competitors, which dilutes adoption and liquidity for Polygon's ecosystem. While Polygon PoS isn't a direct competitor to most Layer 2 rollups and monolithic "Ethereum killers" because it is designed from ground up to be Ethereum sidechain, it does experience indirect competition. And the other Polygon Layer 2 rollup projects are direct competitors. As of Jan 2021, Polygon Hermez is only in [17th place in TLV](https://l2beat.com/). > > **Less resistant to DDoS attacks** > > Like all networks with low transaction fees, it at risk to DDoS attacks since the barrier to making transactions is low > > In early Jan 2022, [Sunflowers Farm \(SFF\) unintentionally DDoS-attacked the Polygon PoS network](https://www.coindesk.com/tech/2022/01/06/polygon-under-accidental-attack-from-swarm-of-sunflower-farmers/) and completely congested the network because it was more profitable to play the game and spam transactions than pay network fees. Transaction fees shot up 20x. Eventually, a hacker exploited the SFF game and reduced its price to zero, and users rejoiced because it cleared the congestion. > > **Centralized governance of the PoS chain** > > Governance is currently centralized. > > The Polygon team single-handedly [increased the transaction fee from 1 to 30 Gwei in Oct 2021](https://thedefiant.io/polygon-transaction-fee-hike/) to combat spammers. They didn't communicate this with the community or ask for feedback ahead of time. > > The Polygon team also [secretly hard-forked the network](https://cryptobriefing.com/a-hacker-stole-1-6m-after-exploiting-a-polygon-bug/) by pushing out a patch 1 day after a hacker stole $1.6M from the network from the Polygon PoS genesis contract in Dec 2021. The team didn't publicize the reason for the emergency patch until over 3 weeks later. > > They have only very recently starting looking to decentralize governance through a [Polygon Ecosystem DAO](https://blog.polygon.technology/state-of-governance-decentralization/), but that could be a long time away. > > Also, the top 4 staking validators out of a total of 100 validators [own 49% of the supply](https://wallet.polygon.technology/staking/) of MATIC, but the staking validators are only used for validation and [block production](https://forum.matic.network/t/matic-system-overview-bor/126), not governance. > > **Split attention on multiple projects** > > For better or worse, Polygon is working on multiple Layer 2 solutions (Polygon PoS, Hermez, Zero, Miden, Nightfall, Avail) and constantly researching different protocols. This is a rather Google-like decision to have multiple competiting products where it becomes the Jack-of-all-trades, Master-of-none. Some of these protocols are really exciting, but the crypto community doesn't know about them because there are too many to focus on. > > **Tokenomics of MATIC Tokens** > > The MATIC token has limited utility. It's used for staking (validation and block production). Once the pool of staking rewards runs out of funds, all staking rewards will need to come from transaction fees, which are tiny. Currently only 75% of the coins are in circulation, and the Polygon Team has an ongoing [token release schedule](https://research.binance.com/en/projects/matic-network) for dumping tokens on the open market. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yk4/coin_inquiries_round_polygon_conarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

CointestAdmin

#Polygon Pro-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Polygon Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > **Background - Polygon is many-sided**. There's the main Polygon PoS network that acts as a sidechain to Ethereum, and then there are so many side projects, many of which deal with Layer 2: > > - MATIC: The main Polygon token, which is present on multiple networks > - Polygon PoS: The main Ethereum side-chain network that most are familiar with. It saves checkpoint state on the Ethereum network every [256 blocks (5 minutes)](https://research.binance.com/en/projects/matic-network). > - Polygon [Hermez](https://docs.hermez.io/#start-here-for-hermez-10-documentation): ZK-rollup Ethereum Layer 2 > - Polygon [Zero](https://blog.polygon.technology/introducing-plonky2/): A fast ZK-stark/ZK-snark hybrid solution built on the Plonky2 protocol. It proofs are theoretically [100x faster than current ZK proof calculations](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/). > - Polygon [Miden](https://blog.polygon.technology/polygon-announces-polygon-miden-a-stark-based-ethereum-compatible-rollup/): Stark-based ZK-rollup Ethereum layer 2 > - Polygon [Nightfall](https://blog.polygon.technology/zk-proofs-protocol-polygon-nightfall-launches-on-testnet-to-provide-low-cost-private-ethereum-transaction/): Enterprise version of Polygon that uses "ZK-Optimistic Rollups" (ZK proof for privacy and optimistic-rollup for scalability) > - Polygon Avail: Standalone network or side-chain solution > - Polygon Plasma Bridge: A legacy bridge that shouldn't be used anymore. > > This post will mainly focus on the Polygon PoS network. > > ------------------ > > **PROs** > > **Much faster and cheaper to use than Layer 1 Ethereum** > > The main benefit of using the Polygon PoS network is that it's an Ethereum side chain that provides faster and cheapers transactions for Ethereum tokens. It can process 1K-10K TPS with a [2-second average block time](https://polygonscan.com/chart/blocktime), which also has deterministic finality. The base fee is only 30 Gwei, and the total transaction fees hovers between [$0.1 to $0.5 USD](https://polygonscan.com/chart/transactionfee) (~4M transactions, ~30k total MATIC fees per day). > > This is also much cheaper than [optimistic rollups](https://l2fees.info/). > > **Largest Layer 2 network adoption** > > Among all the Layer 2 Ethereum solutions, Polygon PoS is completely ahead of every other competitor in terms total locked value with a [$4.8B USD market cap](https://defillama.com/chain/Polygon) (Jan 2021), compared to [$5.4 USD **Combined** Total Locked Value (TLV)](https://l2beat.com/) for the next 10 largest Layer 2 rollup solutions. Note that this does not include the $12B market cap of the MATIC token since that's a coin/token on multiple networks. DeFi support for Polygon is massive. > > One of the main issues with Layer 2 is that most are currently walled gardens with lackluster CEX/CeFi support for on/offramps. After all, the main benefit of lower fees on Layer 2 is lost if you can't on/offramp directly. Polygon is also ahead of competition here with support from Crypto_dot_com, Nexo, Binance (international), and Kucoin. Celsius Network will also have support mid-February. > > Polygon PoS is the only other large network besides Ethereum currently [https://support.opensea.io/hc/en-us/articles/4404027708051-Which-blockchains-does-OpenSea-support-](supported on OpenSea). > > **Weak competition** > > There are so many Ethereum Layer 2 competitors, but nearly all of them are rollups. Polygon PoS works differently in that it's a separate network where the state of the network is stored on Ethereum every 256 blocks. Thus, it doesn't directly compete with them. > > In addition, it also doesn't compete directly with Ethereum killers (ALGO, SOL, ETH, ADA, EGLD, etc.) in that it's designed as a side chain specifically for Ethereum. It shares popularity and as Ethereum grows. > > **Shares Ethereum developer tools** > > Polygon and Ethereum share similar EVM development tools (including Solidity and Vyper), so it's easy for Ethereum's large number of devs to develop for Polygon. > > Many Layer 2 rollups have yet to roll out EVM support while Polygon PoS is already battle-tested. > > **Abundance of research** > > For better or worse, Polygon is working on multiple Layer 2 solutions and constantly researching different protocols. Polygon Zero in particular provides [extremely-fast ZK proofs](https://blog.polygon.technology/zkverse-polygons-zero-knowledge-strategy-explained/), and its technology might become the future leader for ZK rollups. > > ------------------ > > Disclaimer: I currently do not own any MATIC. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/qk4yjj/coin_inquiries_round_polygon_proarguments_november/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Polygon) to find arguments on this topic in other rounds.

torfbolt

Loopring is not a general purpose, EVM compatible solution. It can only execute applications (like their exchange) specifically tailored to its ZK implementation, which hinders adoption.

ec265

You evidently need to do a little more research - read a about the blockchain trilemma, ZK rollups and recursive rollups.