Recently, the prestigious investment company VanEck has published its vision regarding the medium-term future of Ethereum’s layer-2, now on the lips of all users of the decentralized world.
The hedge fund predicts a bright future for this sector niche, which could reach a valuation of 1,000 billion dollars by 2030.
At the same time, however, a parallel failure of many solutions that will not be able to emerge in the midst of fierce competition is expected.
Below all the details.
Summary
Vaneck on Ethereum’s layer-2: bullish even if many will disappear
The US Fund Manager VanEck, recently involved in the loud request for an ETH spot ETF to the SEC, has just revealed a contrasting medium-term view on the future of Ethereum’s layer-2 solutions.
According to studies by the well-known investment company, the sector could experience growth of up to $1 trillion by 2030 in a context where blockchain is able to overcome the scalability limits currently affecting it.
Specifically, VanEck analysts Patrick Bush and Matthew Sigel estimate that Ethereum will eventually capture 60% of the market share across all public decentralized networks, establishing itself as the most widely used cryptographic network in the world.
Currently, the Ethereum layer-2 market is worth 39 billion dollars, with Arbitrum, Optimism, and Base leading the ranking:
On one hand, VanEck shows a predominantly bullish trend for this niche of the Ethereum universe, on the other hand, it believes that the competition in the sector will make several projects obsolete.
On the long-term prospects of many of these second-level networks, the company actually considers them “generally bearish“, with a good portion of them destined to disappear.
VanEck has predicted that out of the 46 L2 chains currently on the market, despite the positive outlook that will attract new investments, the emergence of dozens of other competitors will lead to the failure of many of these.
As shown by the data from L2Beat, the top 3 layer-2 solutions on Ethereum alone capture about $29.3 billion, more than 70% of the total TVL of the sector.
Sigel and Bush also believe that the tokens of these infrastructures have a still too high unlocked supply, potentially harmful to the market due to a too aggressive dilution.
Here is what the analysts reported verbatim:
“The first 7 tokens for L2 collectively already have a $40 billion FDV and there are many strong projects planning to launch in the medium term. This means that there is potentially an additional $100 billion in FDV in L2 tokens that will enter the market in the next 12-18 months. It seems like a bridge too far for the cryptocurrency market to absorb even limited amounts of such supply without huge discounts.”
In such a scenario, only the most innovative solutions capable of obtaining a constant flow of active users and on-chain volumes will be able to survive and benefit from the growth of the Ethereum world.
The Outlook of the Ethereum World: The Most Promising L2 Solutions
While the Ethereum layer-2 sector shows more and more signs of congestion, significant of excessive competition, the best solutions are preparing to attract the next phase of mass adoption.
At this moment, the safest L2s to bet on for the future are the top 3 networks Arbitrum, Optimism, and Base which form a separate market thanks to their much higher valuation compared to other contenders.
Base in particular could have a preferential adoption channel in the future, being supported by the large cryptocurrency exchange Coinbase which boasts a sum of about 7 million monthly active users.
Following are other layer-2 solutions that likely have a chance to establish themselves in this world of sharks: Blast, Starknet, ZkSync Era, Zora, Scroll, Linea, Fraxtal, Mantle, and Mode Network.
Among those who can rely on luxury backers, such as Consensys for Linea or Matter Labs for zkSync, and among those with innovative infrastructural features like Fraxtal and Mode, all these solutions could play a crucial role in the future of Ethereum.
Many other networks, on the other hand, which generally have a TVL lower than 100 million dollars, may struggle to find their ideal role.
As layer-2 solutions, these blockchains serve solely as an alternative channel to reduce the workload on the Ethereum mainnet, helping the main network in terms of scalability.
The most requested qualities, in addition to the presence of a rich ecosystem of opportunities guaranteed by important backers, are therefore those of fast transaction execution and competitive commission costs.
Only the best will survive this race for cryptographic efficiency.
Speaking of fees, we emphasize how the recent Dencun update has allowed for a significant reduction in fees on L2.
