VanEck predicts Ethereum Layer-2’s collective market cap will climb to $1 trillion by 2030

VanEck believes Ethereum’s Layer-2 protocols will reach a collective market cap of $1 trillion by 2030, according to a new research report published on April 3.

The prophecy was revealed in a detailed analysis led by VanEck senior investment analyst Patrick Bush and head of digital research Matthew Sigel.

VanEck’s prediction of a $1 trillion market cap for Ethereum Layer-2s by 2030 reflects belief in the technology’s potential to significantly improve blockchain scalability and efficiency, marking a notable shift in the landscape of digital assets and their underlying technologies .

Solving scalability

The investment firm’s analysis assessed the fast-growing Layer-2 ecosystem across several crucial dimensions: transaction prices, developer experience, user experience, trust assumptions and ecosystem size.

According to the report, Layer-2 technologies, specifically Optimistic Roll-Ups and Zero-Knowledge Roll-Ups, solve Ethereum’s biggest challenge: scalability.

These solutions aim to expand Ethereum’s transaction processing capacity without compromising its core properties of security and decentralization. The analysis points to the EIP-4844 upgrade as a major development, introducing “Blob Space” to significantly reduce data posting costs, financially benefiting Layer-2 operations.

According to the report, the cost savings enabled by EIP-4844 are critical to improving Layer-2 profit margins.

The report also examined the revenue models of Layer-2 solutions, focusing on transaction sequencing as the primary source of revenue. It examined both on-chain and off-chain cost structures, paying particular attention to the expensive proof mechanisms that Zero-Knowledge Roll-Ups use.

TVL

Evaluating the competitive landscape, the study predicts that Layer-2s will capture a significant portion of transaction value and Total Value Locked (TVL) within the Ethereum ecosystem by 2030.

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This growth is partly attributed to the potential of Maximum Extractable Value (MEV) to increase Layer-2 revenues. VanEck’s analysis suggests a future where Layer-2 platforms could provide competitive advantages over Ethereum in specific market segments.

However, the report maintains a neutral tone regarding the speculative nature of the crypto market and the uncertain future of Layer-2 token valuations. It anticipates the emergence of numerous use-case-specific Layer-2 roll-ups, pointing to broader adoption of blockchain technology beyond finance in sectors such as gaming, social media and infrastructure.

VanEck’s analysis presents a compelling vision of the future, where Ethereum Layer-2s evolve from nascent technologies to central cogs in the global blockchain ecosystem.

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