Major centralized cryptocurrency exchanges are increasingly building their own blockchain infrastructures, while diverse opinions about the future of Ethereum’s expansive ecosystem continue to emerge. In this context, the popular trading app Robinhood has decided to create its own Layer 2 (L2) blockchain, which will operate atop Ethereum’s existing blockchain to enhance transaction speed and reduce costs. Ethereum is renowned for its smart contracts and decentralized applications, but its growing popularity has led to increased network traffic, resulting in higher transaction fees and delays. Layer 2 solutions have been introduced to address these issues by performing additional processing on top of the base blockchain, thereby improving performance. However, Ethereum’s founder Vitalik Buterin has expressed concerns about this technology, advocating for more decentralized and open networks instead of centralized solutions. Robinhood’s development of its own L2 blockchain marks a significant move aimed at providing users with faster and cheaper trading opportunities. This initiative indicates that centralized exchanges are moving toward building proprietary blockchain infrastructures, granting them greater control over network performance. Moreover, this trend may spark new debates within the crypto market regarding the balance between centralized and decentralized systems. While this strategy could offer immediate benefits to users, it also poses risks to the fundamental principle of decentralization in cryptocurrency. Going forward, the market will need to observe whether these centralized exchanges’ blockchain solutions can be sustained securely and reliably, and what impact they will have on the Ethereum ecosystem.
Source: coindesk
