VanEck believes that Ethereum Layer-2 protocols will hit a collective $1 trillion market capitalization by 2030, according to a new research report published on April 3.
The prediction is based on the significant growth and impact these technologies are expected to have on enhancing Ethereum’s scalability and efficiency. It was revealed in a detailed analysis led by VanEck senior investment analyst Patrick Bush and head of digital research Matthew Sigel.
VanEck’s forecast of a $1 trillion market cap for Ethereum Layer-2s by 2030 reflects a belief in their potential to significantly enhance blockchain scalability and efficiency, marking a notable shift in the landscape of digital assets and their underlying technologies.
Solving scalability
The investment firm’s analysis assessed the burgeoning Layer-2 ecosystem across several critical dimensions: transaction pricing, developer experience, user experience, trust assumptions, and ecosystem size.
According to the report, Layer-2 technologies, specifically Optimistic Roll-Ups and Zero-Knowledge Roll-Ups, are solving Ethereum’s biggest challenge — scalability.
These solutions aim to expand Ethereum’s capacity for transaction processing without compromising its core attributes of security and decentralization. The analysis points to the EIP-4844 upgrade as a key development, introducing “Blob Space” to reduce data posting costs significantly, thereby benefiting Layer-2 operations financially.
The report explores the revenue models of Layer-2 solutions, emphasizing transaction sequencing as a primary source of income. It examines both on-chain and off-chain cost structures, particularly noting the expensive proof mechanisms that Zero-Knowledge Roll-Ups employ.
VanEck identified the cost reductions enabled by EIP-4844 as pivotal for improving Layer-2 profit margins.
TVL
In evaluating the competitive landscape, the study predicts that by 2030, Layer-2s will capture a significant portion of transaction value and Total Value Locked (TVL) within the Ethereum ecosystem.
This growth is partly attributed to the potential of Maximal Extractable Value (MEV) to augment Layer-2 revenues. VanEck’s analysis suggests a future where Layer-2 platforms may offer competitive advantages over Ethereum in specific market segments.
However, the report maintains a neutral tone regarding the speculative nature of the crypto market and the uncertain future of Layer-2 token valuations. It anticipates the emergence of numerous use-case-specific Layer-2 roll-ups, indicating a broader application of blockchain technology beyond finance to sectors like gaming, social media, and infrastructure.
VanEck’s analysis presents a compelling vision of the future, one where Ethereum Layer-2s evolve from nascent technologies to central cogs in the global blockchain ecosystem.
