Ethereum’s Layer 2 network will reach a market value of $1 trillion in 6 years and will consist of thousands of networks with unique use cases. According to analysts from investment manager Van Eck,
Layer 2 blockchains benefit from The “main challenge” of the Ethereum network – “is its limited ability to process, store, and calculate data,” said Van Eck Senior Digital Asset Investment Analyst Patrick Bush and Head of Digital Asset Research Matthew Sigel. On April 3report
Layer 2’s $1 trillion market cap comes from estimates that Ethereum will capture 60% of the market share among all public blockchains. It then estimates the amount of assets within the Ethereum ecosystem.
There are currently 46 Ethereum L2s with a combined value of $39 billion. The largest of which is Arbitrum valued at $18 billion. followInformation about L2BEAT
“Ethereum’s dominance in smart contracts faces a key obstacle: scalability,” the analysts wrote. “While the network offers unparalleled security and decentralization, But transaction fees and processing times increase as usage intensifies.”
Currently the development of Ethereum The focus is on improving the ability to process Layer 2 transaction data, which is evident in the latest Dencun update that reduces L2 transaction fees.
“We expect L2’s revenue to exceed Ethereum’s as Ethereum cannot match L2’s transaction volume or user experience.”
However, “intense competition” has Bush and Sigel “bearish” on the long-term value of most L2-related tokens.
The top seven Ethereum L2 tokens have a valuation of $40 billion and “with many strong projects” launching in the next 18 months, it will grow to $100 billion.
Analysts predict that “The future will see thousands of dedicated L2 network deployments,” with “a few key players” accounting for a portion of the general purpose L2 market.
These thousands of dedicated networks will be “By sector, application, or function,” with some networks built for specific purposes, such as decentralized social media-only L2 with accompanying apps
refer : cointelegraph.com
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