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.
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.