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Since its inception, Ethereum has been the dominant blockchain in the smart contracts field. It has kept this designation throughout the growth in decentralized finance (DeFi) and non-fungible tokens (NFTs). However, with the arrival of each of these new arenas, there have been swift competitors who continue to battle ethereum for supremacy.

The speed and cost of the blockchains have been one channel via which these competing smart contracts blockchains have had great success when compared to ethereum. Because of its tremendous network traffic, Ethereum remains the blockchain with the highest fees, but only for a limited time. Analysts at Coinbase explain how the leading smart contracts network may potentially retain its throne.

ETH 2.0 Could Be The Solution

In a recent research, Coinbase Institutional experts outline what could help Ethereum maintain its dominance over rival blockchains. ETH 2.0 has been in the works for some time but has been hampered by a number of setbacks that have shaken the project. However, engineers have stated that they are back on schedule, and if all goes as planned, ETH 2.0 might be released in 2022.

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The network will become more scalable as a result of this improvement, enabling faster and cheaper transactions. Once this occurs, analysts believe it will be able to maintain its supremacy over other networks that offer similar services at a lower cost and faster rate.

“ETH 2.0 has the potential to disrupt and perhaps dominate alternative L1s if it can manage cheaper fees and improved network performance,” according to the research.

In the meantime, the research says that the much-anticipated Merge may not be what the majority believes it to be. While it is said to improve throughput and gas prices, it is possible that the network’s existing issues will not change substantially. For one thing, the slower speeds and higher gas prices are the results of increased network demand. “As a result, if network activity goes up following the merger, fees on the base layer have the potential to climb,” the analysts wrote.

Do Not Underestimate the Ethereum Upgrade

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Despite the fact that the merger may not result in a major change if demand increases afterward, the upgrade to ETH 2.0 is not wholly worthless. The upgrade focuses on increasing throughput and drastically cutting gas costs and energy consumption, but there are also advantages to be made in terms of the network’s monetary policy.

A proof of stake technique will be used in ETH 2.0. This means that users will have to stake their ETH in order to participate as network validators. The move could result in an exponential increase in the number of validators, implying that more ETH is being staked on the Ethereum network than created.

If this is the case, Coinbase experts believe it will lower “the supply on exchanges, thereby exerting upward pressure on pricing from a supply-demand perspective.”

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