Mon, December 23

During Times of Market Fall, Investors Turn to Core Assets

During Times of Market Fall, Investors Turn to Core Assets Altcoin News
  • Layer-1 blockchains enhance the underlying protocol itself.
  • Cryptocurrencies are seeing volatile price fluctuations.

The market has been down and is having a steep decline in the last 24 hours. Today, many cryptocurrencies lost value along with other assets like equities and commodities.

After a year of gains and highs, cryptocurrencies are seeing volatile price fluctuations. Moreover, scalability is a must. Thus, anyone engaged in the crypto/blockchain sector has heard of “layer-1” and “layer-2” solutions.

Layer One Protocol

In order to make the entire system more scalable, layer-1 blockchains enhance the underlying protocol itself. Moreover, the most frequent layer-1 solutions are consensus protocol modifications and sharding.

Projects like Ethereum are switching from slower and more energy-intensive consensus algorithms like proof-of-work to quicker and more efficient protocols like proof-of-stake (PoS). One benefit of layer-1 solutions is that no additional infrastructure is required to be added.

Now, during such troubled times, the majority of the top coins belong to layer one protocol. Moreover, that is because investors have shown trust in these core assets.

Famous crypto analyst Lark Davis said in a tweet that out of 15 top coins right now, 10 of them belong to layer one protocol and how people turn to core assets at the time of market distress. Lark’s tweet:

Furthermore, Decentralized finance (DeFi) and the explosion in popularity of non-fungible tokens (NFTs) have been enabled by secure layer-one blockchain protocols capable of hosting smart contracts such as Ethereum. However, as more people utilise the top networks, transaction prices have skyrocketed and processing times have slowed.

Now, consumers unfamiliar with new technologies and who cannot pay hundreds of dollars for each transaction may utilize blockchain and DeFi, credit to layer one protocol.

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A trader himself, Rossi has 7 years of experience trading in the forex market and the passion for writing has brought him to Newscrypto. He is the perfect combination of market knowledge and writing skills, making him one of the most sought-after writers on cryptocurrency.