Mark Smargon, CEO of Fuse, discusses the challenges faced by layer-2 networks and the increasing focus on zero-knowledge (ZK) technology. He emphasizes the importance of improving bridging infrastructure and addressing scalability issues to drive adoption. Smargon also highlights the potential of ZK technology in enhancing privacy and compliance with global regulations.

As 2024 draws near, Hashing It Out is focusing on narratives that are tipped to be at the heart of the cryptocurrency conversation in the new year. In Episode 41, Mark Smargon, CEO of Fuse — a public blockchain ecosystem for Web3 payments — explains how layer-2 networks have become the center of attention in the cryptocurrency space. Smargon highlights how far layer 2s have come, their role in adoption and the increase in general activity, while forecasting trends in the sector, such as a greater focus on zero-knowledge (ZK) technology. He breaks down the origins of the idea of layer-2 networks, explaining that it all started with the arduous task of trying to solve the scaling problems of major layer-1 blockchains. He adds that layer-2 networks solve scalability issues that can’t be fixed by simply doubling the network’s capacity. They have become more prevalent in the Web3 space because of the affordable nature of transactions, which makes them difficult for users and developers to ignore. On the criticism that layer 2s fragment their ecosystem’s user base and liquidity, Smargon believes the standardization of bridges and preventing hacks on them are more significant issues. He argues that if the speed and safety involved with bridging are significantly improved, then the fragmentation of users and liquidity can be dealt with. He explains that currently, bridging is a very painful experience that blocks adoption. Smargon also highlights the trend of more layer 2 networks gravitating toward ZK technology. He describes it as the end-game for most networks because it allows them to prove things without needing all the data, which cuts storage costs and increases privacy. This is why the Fuse network announced that it is building a ZK-powered layer-2 solution powered by Polygon CDK specifically for payments, according to the Fuse CEO. He believes that ZK technology will make it easier to give businesses some privacy while remaining compliant with global regulations. Magazine: Bitcoin ETF optimist and Worldcoin skeptic Gracy Chen: Hall of Flame “So, doing off-chain transactions and improving privacy is essential if you want to improve over Visa with zero-knowledge proofs. Blockchain technology not only becomes practical or comparable to Visa, it actually surpasses Visa in every aspect.” Listen to the full episode of Hashing It Out with Smargon on Spotify , Apple Podcasts , or TuneIn . You can also check out Cointelegraph’s catalog of informative podcasts on the Cointelegraph Podcasts page . This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph. 

Challenges and Trends in Layer-2 Networks: Insights from Fuse CEO Mark Smargon