During the Korea Blockchain Week (KBW) 2022 in Seoul, Cointelegraph’s Brian Newar had a conversation with Alex Svanevik, the CEO of blockchain data firm Nansen. They delved into topics such as the upcoming Ethereum (ET) Merge and its impact on other blockchains.
Svanevik highlighted that during the last bull run, there was a spillover effect in the industry, particularly in the trading of nonfungible tokens (NFTs). Newcomers to the blockchain space were reluctant to pay exorbitant transaction fees of up to $100 on the Ethereum network to purchase NFTs. Consequently, there was a surge in demand for NFTs on other blockchains where the fees were not as high as Ethereum. Svanevik explained:
“In the aftermath of the bull run, we saw a significant demand for NFTs spill over to other blockchains with lower transaction fees. This trend showcased that many newcomers were unwilling to bear the hefty fees associated with Ethereum.”
When asked about the fate of other blockchains after the Merge, Svanevik expressed his belief that many of them may wither away. He anticipated that several chains would become ghost towns or ghost chains. However, he also acknowledged that some chains would find their own niches and thrive.
“While it is likely that many chains will fade into oblivion after the Merge, I do believe that certain chains will carve out their own distinctive roles,” Svanevik stated.
Svanevik identified Solana (SOL), Polygon (MATIC), and Avalanche (AVAX) as examples of chains that have successfully established their own ecosystems. He further emphasized that there are more chains with the necessary infrastructure to attract developers into their ecosystems.
Drawing an analogy between blockchains and cities, Svanevik likened decentralized exchanges (DEXs), marketplaces, and blockchain explorers to essential establishments like hospitals, law firms, and the media in cities.
“Just as cities require various institutions to function effectively, blockchains need decentralized exchanges, marketplaces, blockchain explorers, and other supporting elements to thrive,” Svanevik remarked.
During the same event, Sergej Kunz, the co-founder of 1inch, expressed his belief that the decentralized finance (DeFi) market has immense potential for growth in South Korea. However, he acknowledged that there are obstacles and barriers to entry, including a lack of knowledge in using crypto wallets and understanding DeFi.