VanECK, an international fund manager, has great hopes for Ethereum Layer 2 networks (L2) and predicts that they could reach a value of over $1 trillion in 2030.
VanECK stated that despite its ambitions for L2s it still remains committed. “generally bearish” The long-term potential of certain of these networks. It is important to consider the long-term prospects of some of these networks. report We analyzed 46 L2 networks in five areas of importance and forecasted “thousands” Soon, more networks are expected to appear.
“At its core, Ethereum’s primary challenge is its limited capacity to process, store, and compute data in the form of financial transactions. This bottleneck in data throughput is being addressed by offloading much of the data processing and computation to Layer-2 blockchains,” VanECK analysts wrote the following in their report.
Analysts estimated that Ethereum could grab 60 percent of all market shares across public blockchains. The analysts estimated that the L2 network alone would be worth $1 trillion in this scenario.
“Ethereum’s dominance in smart contracts faces a critical hurdle: scalability. While the network offers unparalleled security and decentralization, transaction fees and processing times soar when usage intensifies,” The analysts continue.
In the report, it was stated that the current focus of Ethereum development is to enhance the network’s capability to process L2 transactions data. This highlights the recent Dencun upgrade. The latest Ethereum Mainnet Soft Fork saw the L2 Transaction Fees lowered through the use of an specialized data saving feature called “Blobs.”
The analysts also concluded that L2 networks will likely generate “substantially more” They believe the Ethereum base network will generate more revenue than mainnet. The Ethereum base network is a better investment, according to some. cannot “match” The second layer network’s transactional efficiency and the user experience.
The analysts were not optimistic about these L2 network’s long-term prospects.
“We see cutthroat competition amongst L2s where the network effect is the only moat. As a result, we are generally bearish on the long-term value prospects for the majority of L2 tokens,” The writer wrote.
Just the seven top L2 networks were responsible for over 80% of all traffic. $40 billion In total value. As several noteworthy projects will be launching over the next few years, this metric could reach as much as $100 billion. next 18 months.
They also envisioned an era dominated by “thousands of use-case-specific” The Layer 2 solutions (L2) are a new generation of layering technologies. “just a few major players” In the wider market. Also, they expect to a “handful of general-purpose chains,” The network effect increases their value with more users.
They also highlighted that the move towards zero-knowledge frameworks (ZKU) is inevitable, as most roll-ups are due to “its many advantages,” This is a significant evolution for the L2 ecosystem.
It is not surprising that the fund manager makes a prediction. awaits The SEC has issued a ruling on the Ethereum ETF.
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Source: crypto.news