As the Dencun upgrade gains traction, analysts anticipate a further decline in Ethereum’s dominance in smart contract deployment, particularly with the advancement of layer-2 solutions.
Ethereum’s position as the primary platform for deploying smart contracts is waning, with increasing competition from layer-2 networks (l2), as revealed by analysts at Flipside in a recent research report. According to their findings, Polygon and BNB Chain (formerly Binance Smart Chain) are leading the way in smart contract deployments, with nearly 640 million contracts deployed since January 2022.
Furthermore, Flipside highlights that Optimism, a layer-2 solution built on Ethereum’s architecture, has accounted for a significant portion of total smart contract deployments in 2024.
The report also notes a surge in contract deployers, indicating a shift in the landscape. However, it’s important to note that it’s not only developers who deploy contracts; smart contracts themselves can also deploy contracts.
Meanwhile, deployers associated with non-fungible tokens (NFTs) have experienced a decline, suggesting a potential shift in focus towards decentralized finance (DeFi) in the upcoming market cycle.
According to a research report by Galaxy Digital, 2024 is expected to be a critical year for Ethereum as it faces competition from other layer-1 blockchains like Solana. Galaxy Digital analysts point out the challenges and technological risks associated with Ethereum’s modular architecture and various rollup types, highlighting Solana as a significant competitor due to its monolithic architecture and versatility.