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Blockchain scalability is key to mass adoption. Layer 1 solutions like Ethereum 2.0 aim to increase throughput via sharding and proof-of-stake. Layer 2 solutions, such as rollups and sidechains, offload transactions to reduce mainnet load. Each has tradeoffs: L1 offers security and decentralization but faces scaling limits; L2 enhances speed and reduces fees but may sacrifice some decentralization. Which path will win?

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Both paths are crucial for different use cases. Ethereum 2.0's L1 sharding can provide a strong foundation, while L2 solutions like rollups offer immediate scalability benefits. The future likely sees a hybrid approach, leveraging the strengths of both layers.