According to CryptoPotato, a recent report by investment manager VanEck predicts that Ethereum’s Layer 2 scaling networks will reach a market capitalization of $1 trillion by 2030. This prediction is based on the assumption that Ethereum will maintain a 60% market share across all public blockchains and takes into account the volume of assets within its ecosystem.
VanEck's senior digital assets investment analyst, Patrick Bush, and digital assets research head, Matthew Sigel, highlighted the potential of Layer 2 blockchains to transform Ethereum’s scalability and performance. They noted that Ethereum’s dominance in smart contracts is hampered by scalability issues, which become more pronounced during periods of high usage. Layer 2 networks, they suggest, could capitalize on Ethereum’s limited capacity to process, store, and compute data, thereby unlocking new opportunities for innovation and growth within the blockchain ecosystem.
The report also emphasized the role of Layer 2 solutions, particularly Optimistic Roll-Ups and Zero-Knowledge Roll-Ups, in enhancing Ethereum’s transaction processing capabilities while maintaining its core principles of security and decentralization. The recent Dencun upgrade to Ethereum, which introduces the innovative 'Blob' feature to reduce data posting costs, was highlighted as a significant development that could improve Layer 2 operations financially.
VanEck's analysis also suggests that Layer 2 networks could capture a significant portion of transaction value and Total Value Locked (TVL) within the Ethereum ecosystem. This growth is expected to be partly driven by the potential of Maximal Extractable Value (MEV) to enhance Layer 2 revenues. The analysts also foresee Layer-2 platforms offering distinct competitive advantages over Ethereum in specific market sectors.
However, the analysts also expressed caution regarding the long-term value of most layer 2-related tokens due to intense competition, which could impact the long-term value of many projects. They noted that the top seven Ethereum layer 2 tokens already have a fully diluted valuation of $40 billion, with more projects expected to launch in the coming months. The report predicts a future landscape characterized by thousands of use-case-specific Layer 2 networks catering to various sectors, including gaming, social media, and infrastructure. These specialized chains are expected to complement Ethereum’s general-purpose chains, with a select few emerging as major players due to network effects and widespread adoption.