In a response to a tweet suggesting that payments platform Square refusing to support crypto payments was ‘dumb’, Ethereum co-founder Vitalik Buterin has highlighted the benefits of supporting the digital asset as a payment method.
He stated that using ETH for payments would also add support for other crypto assets including MKR, UNI, wBTC, and any other stablecoin.
More people should support ethereum for payments. The nice thing about supporting ethereum is that you’re not just accepting ETH, you also get support for MKR, UNI, WBTC, and every stablecoin for free. And there’s already like three working layer-2 scaling solutions on mainnet. https://t.co/EdD7J8isk8
— vitalik.eth (@VitalikButerin) October 1, 2020
Naturally, there was quite a reaction from the crypto community considering that transfer fees have skyrocketed in recent months making Ethereum slow and expensive to use.
The DeFi farming frenzy, driven by yield jumping ‘degens’ (degenerate farmers), has resulted in massive demand being placed on Ethereum which has driven network fees through the roof.
September has witnessed the highest gas fees on record with several spikes taking the average cost into double figures. At the time of writing, average transaction fees had fallen to around $3 according to bitinfocharts.com, but that is still way too high for the average user.
Buterin responded with a suggestion to use Layer 2 options such as zkSync, Loopring, or the OMG Network. Matter Labs launched the L2 payments gateway zkSync to mainnet in mid-June this year, with the claim that it enables ‘PayPal-scale’ throughput for dApps or wallets.
Ethereum zkRollup exchange and payment protocol Loopring launched a Layer 2 token swap DEX in mid-September for high speed, low-cost token exchanges. Meanwhile, the OMG Network, which launched in 2017 to provide Plasma scaling for Ethereum, integrated the Tether stablecoin in August to facilitate cost-efficient payments.
There are other options such as the Matic Network but Buterin did not mention them in this dialogue.
When ETH 2.0?
The real scaling for Ethereum will come when Serenity Phase 1 is launched but that is still at least a year away. Beacon Chain, or Phase 0, must be rolled out first and the good news is that it could be before the end of 2020.
Testing for Beacon Chain is entering the final stages now with around 65,000 validators operating on the Medalla testnet. A further testnet called ‘Spadina’ was recently run as a ‘dress rehearsal’ for ETH 2.0 genesis but it failed due to client issues and low participation. Another testnet called ‘Zinken’ has been planned for launch on Oct. 12.
Until Phase 1 is ready, these Layer 2 solutions are the only viable options for avoiding heavy gas fees.
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