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Blockchain Fragmentation Is a Major Problem That Must Be Addressed in 2025

Press Releases Crypto News Coindesk Blockchain Fragmentation Is a Major Problem That Must Be Addressed in 2025

Over the past year, the crypto industry has attracted users on an exponential scale, with monthly active addresses tripling from 70 million in 2023 to over 220 million in 2024. With over 300 chains listed, the ecosystem should be able to cater to the needs of all types of users sustainably. However, in this sprawling landscape, a majority of activity and liquidity is locked within multiple Ethereum Layer 2’s.

In its current state, Ethereum is reminiscent of early 1500s Europe, which experienced breakthroughs like the printing press and advanced shipbuilding that enhanced resource management. Today, Ethereum’s flourishing DeFi ecosystem is equipped with primitives such as lending and borrowing, staking and restaking. However, much like Europe’s challenges with scarce and overutilized resources, Ethereum faces obstacles in making other assets useful in its own home — its Layer 1.

The current blockchain ecosystem thus remains frustratingly fragmented. While chain abstraction has been a trending narrative with many projects making progress, solutions like intents usually involve sequencers that favor large players when filling orders between blockchains, leading to centralization. Furthermore, there is no additional utility created for users as most solutions are focused on simply swapping assets.

Despite impressive technological foundations, we’ve created a landscape where digital assets are constrained rather than empowered. Top blockchain resources such as Ethereum are underutilized and limited by rigid architectural boundaries.

For true interoperability to exist, in 2025, we must take a step back and re-approach blockchain modularity from a fresh perspective.

The illusion of modularity

The common analogy of blockchain as “Lego blocks” oversimplifies a complex technological landscape. Unlike uniform construction pieces, blockchain components are intricate systems with specific dependencies and complex interoperability challenges.

Consider a practical scenario: moving an asse

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Author: Altan Tutar

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