VanEck Forecasts $1 Trillion Valuation for Ethereum’s Layer-2 Networks by 2030
VanEck, a prominent investment management firm, has made a bold projection, foreseeing a monumental $1 trillion valuation for Ethereum’s Layer-2 (L2) networks by the year 2030. This forecast underlines the crucial role played by L2 solutions in addressing Ethereum’s core scalability challenges and facilitating network expansion.
How Ethereum Layer-2s Can Achieve $1 Trillion Valuation Together?
Based on data from CoinMarketCap, the current market capitalization of L2 solutions amounts to $28 billion. If VanEck’s prediction materializes, it would signify a substantial fourfold increase in the valuation of L2 solutions within the next six years. VanEck’s analysis rests on the premise that Ethereum ecosystem smart contracts will capture a significant market share of 60%.
- L2 Valuation – Base Case
- Ethereum Ecosystem Smart Contract Market Share: 60%
- L2 Economics
- Estimated Revenue 2030 ($ million): $48,659
- Global Tax Rate on Crypto: 15%
- Sequencer Cut: 1%
- Value to Tokenholders in 2030 ($ million): $40,947
- Future cash flow terminal multiple: 25
- L2 fully-diluted valuation 2030 ($ million): $1,023,681
The analysis meticulously examines L2 solutions from various angles, assessing transaction pricing, developer and user experience, trust assumptions, and ecosystem size. By executing transactions off the Ethereum mainnet, L2 blockchains offer a more efficient approach to data processing, improving overall network performance.
These networks employ strategies like roll-ups to bundle transactions, enhancing the interaction process with Ethereum and reducing bottlenecks. Furthermore, the report distinguishes between optimistic roll-ups (ORUs) and zero-knowledge roll-ups (ZKUs), the primary types of L2 solutions that offer distinct approaches to transaction validation.
In terms of economics, L2s generate revenue from transaction fees, with priority fees and sequencing models influencing their financial structures. The introduction of Blob Space, a specialized data layer for L2 transaction postings, represents a significant advancement in cost reduction and efficiency enhancement for these networks.
VanEck’s valuation forecast is rooted in a thorough analysis of potential revenue sources, considering factors such as transaction volume, smart contract platform market share, and the projected growth of assets secured within the Ethereum ecosystem.
Hot Take: Future Outlook for Layer-2 Networks
The projected $1 trillion valuation for Ethereum’s Layer-2 networks by 2030 signals a promising future for these scaling solutions, showcasing their pivotal role in the network’s expansion and performance enhancement. As L2 solutions continue to evolve and gain traction, they are poised to transform the Ethereum ecosystem and drive significant value for stakeholders.
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