Web2 infrastructure mammoth Cloudflare announced last week that it would become a validator on Ethereum’s proof of stake chain. In other news, venture capitalist firm Andreessen Horowitz released it maiden crypto report detailing that Ethereum dominance is yet to be matched. Details below:
Web2 infra giant Cloudflare to stake on Ethereum and run validator nodes
In anticipation of the Merge, content delivery network Cloudflare divulged that over the next months (pre-merge), it would fully stake Ether to run validator nodes on the network, further committing to abstain from adding proof of work to its infrastructure.
Its stance against proof of work mining is due to the intensive energy use characteristic of the consensus mechanism. Though this design makes the blockchain highly secure, it’s too wasteful to support mass-scale use.
Cloudflare neither disclosed details on specific dates nor indicated how many nodes it intends to run. However, it expressed interest in researching the next-generation proof of stake consensus model that Ethereum is migrating to. The goal is to enhance research and development of the core infra to power the Ethereum blockchain in a secure, fast, and energy-efficient way, with the nodes providing an appropriate testing ground for said traits.
The internet service company said that these tests would align with the ambition to reduce Web3 energy consumption and enhance the ability to scale. Cloudflare also mentioned the proof of spacetime consensus mechanism employed by Litecoin as potentially a lead model for the next generation. The cloud platform noted that it is only the start, as there are plans to integrate more than just Ethereum.
Cloudflare believes that the relationship will boost global decentralization for Ethereum, with the network getting exposure in regions including Latin America, the APJC, and EMEA. As a Web2 giant, its increasing ventures into Web3 will play a significant role in boosting adoption. In 2018, the firm introduced a gateway to the InterPlanetary File System (IPFS), and it elevated its blockchain involvement with the launch of the Ethereum Gateway the following year.
The Gateway enabled users to interact with the Ethereum blockchain via smart contract-powered websites without the need for additional software.
a16z crypto report says Ethereum still reigns supreme over alts
VC firm Andreessen Horowitz (a16z) last Tuesday released the 2022 State of Crypto report in which it explored several matters, among them Ethereum’s unmatched dominance despite not-so-favorable network conditions.
Ethereum is still at the top
Penned by Daren Matsuoka, Eddy Lazzarin, Robert Hackett, and Chris Dixon, the report noted that currently, Ethereum is significantly ahead of competing ecosystems, seeing higher development activity and demand, despite the frequent astronomical fees characteristic of the network. Ethereum’s 4,000 count in monthly developers is four times that of Solana and far from Bitcoin and Cardano’s 500 and 400 developers, respectively.
The a16z research noted that such is the case due to Ethereum’s early mover status, in addition to the support of a strong emphatic community. As such, users are comfortable with parting with as much as $15 million in seven-day average fees to gain blockchain space despite the Ethereum network being still young, the report said. Competitors stand far from Ethereum’s fees – BNB Chain averages $1.3 million and Avalanche $821k over the said period.
A double-edged sword
User enthusiasm over the Ethereum network is a double-edged sword as the blockchain has historically sacrificed scaling for decentralization – it’s a necessary compromise. This has led to opportunistic networks that offer users better performance than Ethereum to bite on the latter’s market share. For instance, competitors including Solana, Polygon, and BNB Chain have become better performers on daily active users and transactions.
Further, though layer twos are working well enough to improve the mainnet, Ethereum has promised users key updates that would enable the network to enhance network performance and trim the fees. Said changes couldn’t come sooner if Ethereum is to fend off attacks to its dominance.
Even with the to-and-fro between Ethereum and its competitors, a16z, believes that the plate is big enough to share, insisting there’ll be multiple winners with the potential of further innovation still massive.
To learn more about Ethereum visit our Investing in Ethereum guide.
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