Banking giant VanEck has valued Ethereum Layer-2 (L2) solutions at an incredible $1 trillion in a bold move. predictionhighlighting the critical role that efficiency gains and scalability improvements will play in the development of blockchain technology.
Ethereum Layer 2 set to see significant increase in valuation
According to VanEck researchers, Ethereum layer 2 large-scale networks are expected to reach the aforementioned market valuation by 2030. Patrick Bush, senior investment analyst at VanEck, and Matthew Sigel, head of digital research, led the overall forecast.
Specifically, the bold prediction was made while evaluating Ethereum Layer 2 in five distinct important areas. These include Layer 2 transaction pricing, developer experience, user experience, trust assumptions, and L2 ecosystem size. Additionally, this was achieved by first assessing the amount of assets in the Ethereum ecosystem and then projecting that. ETH would account for around 60% of the market share among public blockchains.
It should be noted that layer 2, by managing the majority of transactions outside the main blockchain, resolves scalability issues. In this case, zero-knowledge roll-ups (ZKU) and optimistic roll-ups (ORU) are the two main forms of layer 2 networks.
Given the transaction processing limitations of the main blockchain, these L2 technologies might be able to generate more funds than Ethereum because they manage scalability by processing transactions off the main network.
As the researchers argue, in the future, a few general-purpose L2s will be in charge, but a plethora of roll-ups tailored to certain use cases will also appear, allowing social media networks to be hosted on different rollups.
The report said:
Beyond the dominance of a few roll-ups among general-purpose L2s, we foresee a future of thousands of use-case specific roll-ups. These L2 will be segmented by sector, application or function. Other channel types may be specifically intended to host an entire industry, such as a roll-up that hosts a social media network, as well as applications wanting to create products and services for that social media network.
This forecast by VanEck primarily highlights the possibility that L2 solutions could outperform Ethereum in terms of value over the next six years. The report also claims that layer 2 blockchains will benefit from Ethereum's limited processing power, as well as its data storage and computing capabilities.
ETH price is experiencing bearish activity
Currently, The price of Ethereum is falling after once again failing to surpass the $4,000 mark. Even though the market is currently correcting downward, a positive rebound is still expected soon.
Compared to other notable coins in the crypto market like Bitcoin, ETH has underperformed over the past month. Therefore, there has been speculation within the cryptocurrency community whether a further decline was imminent.
ETH has seen a decline of over 10% since March, following a rise to $4,091 before the Dencun upgrade. At press time, Ethereum was trading at $3,343, showing a 1% increase over the past day.
Its market capitalization is now valued at $401.42 billion, up 1% in the last 24 hours. However, its daily trading volume fell by more than 30%, standing at $13.50 billion.
Featured image from iStock, chart from Tradingview.com
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