L2 solutions based on Ethereum will drive revenue to $48.7 million annually over the next six years. By that time, the sector will consist of thousands of Layer 2 networks deployed for specific use cases.
Analysts of investment company Van Eck published a forecast on the development of the Ethereum L2 solutions sector until 2023. According to the authors, L2 protocols solve the main problem faced by the Ethereum blockchain network, namely scalability.
Within six years, Ethereum is predicted to take 60% of the market share in the field of public blockchain networks. By that time, the capitalization of the Ethereum L2 solutions sector will exceed $1 trillion, and their total annual revenue will be $48.7 million.
The analysts believe that in the future, the Layer 2 solutions sector will include several large general-purpose L2 protocols and many thousands of networks segmented by sector, applications, and functions requiring higher bandwidth, or deployed for specific usage scenarios within a single dApp.
The analysts note that increased competition is expected in the sector, so the long-term market outlook for most native tokens of L2 projects doesn’t look optimistic. As of April 4, 2024, the sector’s total capitalization is $33.2 billion, CoinGecko says, with TVL of L2 networks exceeding $39.3 billion, L2BEAT reports.
According to Van Eck experts, a significant role in the development of L2 networks will be played by the Dencun upgrade, which made it possible to significantly reduce their commission costs. Moreover, analysts predict the transition of most L2 protocols to zero-knowledge proof (ZKP) because of its numerous advantages.
