VanECK, a global investment company, has significant expectations for Ethereum Layer 2 (L2) networks. By 2030, the value of all of them could be more than $1 trillion.
VanECK was positive about the growth possibilities of L2 networks but cautious about the long-term prospects of many of these platforms. The company recently conducted a study that examined 46 L2 networks using different metrics and predicted that “thousands” more would appear soon.
Ethereum’s Data Processing Challenge and Solution
Analysts at VanECK said that Ethereum’s most significant issue is that it can’t process and store data quickly, which is especially clear when there are a lot of transactions. They said this problem is being fixed by sending computation and data processing to Layer-2 blockchains.
According to the study, Ethereum could get 60% of the market share for all public blockchains. This could make the market cap for L2 networks alone $1 trillion.
Even though the experts agreed that Ethereum was the leader in smart contracts, they stressed that scalability was a major problem. During times of high activity on the Ethereum network, transaction fees and processing times go up.
The study discussed recent changes on Ethereum, like the DenCun upgrade that is meant to improve the processing of L2 transaction data. Transaction fees for L2 have decreased since features like “Blobs” were added.
Analysts at VanECK thought that L2 networks would make more Funds than the Ethereum mainnet because they were better at processing transactions and improving the user experience. There was still a negative view of the long-term value of most L2 tokens, though. They pointed to fierce competition and network effects as major reasons for this.
The study said that the top seven L2 networks already have $40 billion locked up in value. This amount will rise to $100 billion in the next 18 months as some major projects begin.
Vaneck imagined a future with a few significant players in the market and thousands of specialised L2 options. They also thought that general-purpose chains would become more popular as network effects and more users adopted them.
The experts pointed out the move toward the zero-knowledge framework (ZKU) and said it would happen for most roll-ups because it has many benefits. This marks a significant shift in the L2 ecosystem.
VanECK is also waiting for a ruling from the U.S. Securities and Exchange Commission (SEC) on its Ethereum ETF filing, which shows that the company is still interested in the Ethereum ecosystem.
