Banking behemoth VanEck has valued Ethereum Layer-2 (L2) solutions at an astounding $1 trillion in a daring prediction, emphasizing the critical role that efficiency gains and scalability improvements will play in the development of blockchain technology.
Ethereum Layer 2s Poised For Significant Increase In Valuation
According to VanEck researchers, Ethereum Layer 2 scaling networks are expected to soar to the aforementioned market valuation by 2030. Leading the comprehensive prediction were Patrick Bush, the senior investment analyst at VanEck, and Matthew Sigel, the head of digital research.
Specifically, the bold forecast was carried out while evaluating Ethereum Layer 2s in five distinct important areas. These include Layer 2s transaction pricing, developer experience, user experience, trust assumptions, and L2s ecosystem size. In addition, it was made by first assessing the amount of assets in the Ethereum ecosystem and then projecting that ETH would account for about 60% of the market share among public blockchains.
It is noteworthy that Layer 2s, by managing the majority of transactions off the main blockchain, addresses scalability issues. In this case, Zero-knowledge roll-ups (ZKUs) and optimistic roll-ups (ORUs) are the two major forms of layer 2 networks.
Given the limits of the main blockchain’s transaction processing, these L2 technologies may be able to generate more funds than Ethereum since they handle scalability by processing transactions off the main network.
As the researchers stated, in the future, a few general-purpose L2s will be in control, but a plethora of roll-ups tailored to certain use cases will also arise, making it possible to host social media networks on different rollups.
The report read:
Beyond the dominance of a few roll-ups among general-purpose L2s, we forecast a future of thousands of use-case-specific roll-ups. These L2 will be segmented by sector, application, or function. Other types of chains may be specifically geared towards hosting a whole sector, such as a roll-up that hosts a social media network, as well as applications that want to build products and services for that social media network.
This forecast by VanEck primarily points to the possibility that L2 solutions could perform better in terms of value than Ethereum in the next six years. The report also claims that Layer-2 blockchains will benefit from Ethereum’s restricted processing power, as well as its data-storing and computation capabilities.
ETH Price Experiences Bearish Activity
Presently, Ethereum’s price is declining after failing to rise above the $4,000 mark once more. Even though the market is currently correcting downward, a positive bounce is still anticipated to occur soon.
Compared to other notable coins in the crypto market like Bitcoin, ETH has underperformed over the past month. Consequently, there have been speculations within the cryptocurrency community, if a further decline is imminent.
ETH has seen a decrease of more than 10% since March, following a surge to $4,091 ahead of the Dencun upgrade. As of press time, Ethereum was trading at $3,343, displaying an increase of 1% in the past day.
Its market cap is now valued at $401,42 billion, with a 1% rise in the last 24 hours. However, its daily trading volume has plummeted by over 30%, pegging at $13,50 billion.
Source: NewsBTC