Anders Helseth, vp and head of analysis in crypto analytics agency K33 (previously referred to as Arcane Analysis), shares a stunning bearish prediction for Ethereum (ETH) as a know-how and Ether as an asset.

“Bear case for Ether”: Why are cross-chain and bridges harmful for Ethereum (ETH)?

In response to his thread shared on March 16, 2023, Ethereum’s (ETH) dominance within the sensible contract section is perhaps on borrowed time. Its customers keep away from switching to rivals on account of issues with shifting liquidity out of Ethereum (ETH).

The bear case for Ether 🧵

— Anders Helseth (@andershelseth) March 16, 2023

The fashionable bridge ecosystem is simply too costly to make use of, too “empirically insecure” and too tough to make use of so far as the vast majority of Ethereum (ETH) customers are involved.

As such, typically, individuals are nonetheless utilizing Ethereum (ETH) as a result of they can’t cease doing so. Transferring liquidity by way of bridges remains to be too dangerous and too expensive.

This, in flip, is bearish for Ethereum (ETH) in the long run: as soon as the Web3 section turns into really chain-agnostic (cross-blockchain worth switch turns into frictionless and cheap), cash will go away Ethereum (ETH).

L2s would possibly destroy their very own L1 quickly

Even when this situation is just not legitimate, Ethereum (ETH) would possibly lose its viewers because of the irrelevance of the fashionable use instances which are related to the need of storing ETH (“lock-ups”).

Final however not least, the evolution of Ethereum (ETH) L2s would possibly make its major community out of date: the issue of block area will likely be solved for good:

Scaling options make blockspace nearly infinite. Scaling options scale back the flexibility to seize the willingness to pay for transactions. So, even when the whole lot is scaled on Ethereum, transaction charges can be so low-cost that Ether captures little worth

As lined by U.As we speak beforehand, bridge safety is among the many most severe roadblocks for blockchain scaling.

In 2022-2023, the vast majority of funds stolen in hacks have been misplaced due to bridge design flaws.