Capitalization of L2 solutions could rise to $1 trillion in 6 years

VanEck experts Patrick Bush and Matthew Siegel estimate that the market capitalization of second-level (L2) solutions on the Ethereum network will be $1 trillion by 2030.

VanEck senior investment analyst for digital assets Patrick Bush and head of research Matthew Siegel believe that L2 solutions will focus their efforts on eliminating one of the main problems of the Ethereum network – the limited ability to store and process information.

According to VanEck experts, over the next 6 years, L2 solutions will give Ethereum the opportunity to occupy at least 60% of the total public blockchain market. At the moment, there are 46 such projects operating in the network, and the total volume of blocked assets (TVL) in them is $39 billion. The largest of all in terms of the volume of blocked assets is the Arbitrum solution – the TVL of the project is $18 billion.

As analysts have highlighted, Ethereum's dominance in smart contracts has hit a roadblock: scalability. Transaction fees and processing times increase as network usage increases.

VanEck believes that Ethereum developers are paying close attention to this problem. Dencun's update reducing fees on L2 projects is part of the roadmap to address the above issues.

Patrick Busch and Matthew Siegel believe that the overall revenue of L2 developments will surpass that of the Ethereum mainnet, and future L2 solutions will be segmented by function, application type, and various sectors of the crypto industry.

Earlier, experts from the American cryptocurrency exchange Coinbase said that due to the increase in the number of liquid tokens (LRT) created during the restaking process, the Ethereum ecosystem may suffer.