VanEck Predicts Ethereum Layer-2s To Hit $1T Market Cap By 2030


Analysts from investment manager VanEck have predicted that Ethereum’s Layer-2 scaling networks will hit a market capitalization of $1 trillion by 2030. 

VanEck’s prediction is based on the significant growth and impact of Layer-2 technologies on Ethereum’s scalability and efficiency. 

Ethereum Layer-2s To Hit $1 Trillion Market Cap 

The prediction by VanEck was made in a detailed analysis led by its senior investment analyst, Patrick Bush, and the head of digital research, Matthew Sigel. VanEck’s prediction regarding Ethereum Layer-2s hitting a $1 trillion market cap indicates a strong belief in the technology’s potential to help enhance Ethereum’s scalability and efficiency. It marks a significant shift in the digital asset landscape and the underlying technologies powering them. According to the report, Layer-2 blockchains are set to capitalize on Ethereum’s limited processing capacity and its ability to store and compute data. 

“Layer-2 blockchains are set to capitalize on Ethereum’s “primary challenge” — its “limited capacity to process, store, and compute data.”

The prediction was made by estimating that Ethereum would take up around 60% of the market share across public blockchains and then estimating the volume of assets within the Ethereum ecosystem. 

“Ethereum’s dominance in smart contracts faces a critical hurdle: scalability. While the network offers unparalleled security and decentralization, transaction fees and processing times soar when usage intensifies.”

There are 46 Layer-2 networks with $39 billion in total value locked (TVL). The largest Layer-2 network is Arbitrum, with a TVL of $18 billion. 

Addressing Scalability Issues 

The report states that Layer-2 technologies, like Optimistic Roll-ups and Zero-Knowledge Roll-ups, are helping address Ethereum’s scalability issues. Optimistic Roll-ups and Zero-Knowledge roll-ups are expanding Ethereum’s capacity to process transactions without compromising on its core attributes of decentralization and security. The report cites the example of EIP-4844, which saw the introduction of “Blob Space,” which helped to reduce data posting costs, benefiting Layer-2 operations. 

The report pointed out that the introduction of features such as Blob Spaces indicates that Ethereum’s development is focused on improving its ability to process transaction data from Layer-2 networks. The analysts also noted the significant potential for substantially more revenues to be generated on Layer-2 networks rather than the primary Ethereum network. 

“We expect L2 revenues to exceed Ethereum’s because Ethereum cannot match the transaction throughput or user experience of L2s.”

Growing Number Of Layer-2s 

The report noted that Ethereum Layer-2 tokens have a $40 billion fully diluted valuation, and introducing more projects over the next 18 months could increase the number to $100 billion. 

“It seems a bridge too far for the crypto market to absorb even limited amounts of that supply without massive discounts.”

They also predicted thousands of use case-specific L2s, with only a few major players in the general-purpose Layer-2 market. The use case-specific networks would be segmented by sectors, applications, or functions and built for specific functions. 

“It is also clear that most roll-ups will eventually move towards the zero-knowledge framework (ZKU) due to its many advantages.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source link

About The Author

Scroll to Top