Explosion of L2 networks: Ethereum ready to tame its rivals

The battle of Layer 2 solutions is raging among Ethereum, Binance, and Coinbase. But is it mere vanity or a lifeline for Layer 1 blockchains suffering from congestion problems? According to VanEck analysts, containing the rise of L2 networks will be challenging. By 2030, the market capitalization of similar mechanisms deployed on Ethereum could explode to reach 1 trillion dollars.

Ethereum L2: Prediction of Colossal Capitalization

There is currently a rush toward Layer 2 solutions such as Base (Coinbase), Arbitrium One, OP Mainnet, and many others. The reason? Their remarkable scalability, which constitutes a major asset as a blockchain infrastructure.

VanEck analysts forecast a spectacular rise of Ethereum Layer 2 (L2) networks, reaching a market capitalization of 1 trillion dollars by 2030, reports CoinSpeaker.

The report, authored by Patrick Bush and Matthew Sigel, highlights the challenges of Ethereum in terms of data processing. Despite its dominance in smart contracts, its scalability limitations remain a hindrance.

However, Ethereum is striving to improve its Layer 2 transaction processing capabilities, as demonstrated by the recent Denizen upgrade.

The bold prediction of VanEck is based on the belief that L2 networks are ready to capitalize on Ethereum’s weaknesses and meet the growing needs of an expanding ecosystem.

With rising transaction fees and prolonged processing times on Ethereum (ETH), the adoption of L2 networks seems like an inevitable solution for the future of blockchain.

The New Titans of Blockchain

In a striking report, VanEck analysts predict a future where Ethereum’s Layer 2 networks will surpass the base network in terms of revenue. According to Bush and Sigel, this rise is inevitable in the face of Ethereum’s inability to compete in terms of transactions and user experience.

This futuristic blockchain landscape, depicted by VanEck, reveals a dynamic ecosystem comprised of thousands of specialized L2 networks, promising to redefine industries and open new horizons. From decentralized social media platforms to specialized financial applications, the possibilities for innovation seem limitless.

However, enthusiasm must be tempered, warn analysts. Despite the opportunities offered by L2 tokens, the competition is fierce. The top seven Ethereum Layer 2 tokens already display a valuation of 40 billion dollars, which raises the possibility of market saturation.