Ethereum Layer-2 valuation is expected to reach $1 trillion by 2030

The valuation of Ethereum layer-2s is predicted to reach a massive milestone of $1 trillion by the end of 2030. This is based on the fundamental analysis of five key areas under the lenses of user experience, developer experience, and technical capability. Key areas in the conversation are transaction pricing, developer experience, trust assumption, user experience, and ecosystem size.

Transaction pricing pertains to the cost that users incur for a single transaction or a batch of transactions, depending on their requests. Developer experience and user experience venture out the same thing from two different sides. Being seamless remains at the center of the stage as developers look to bring out the best products and services and users look to access them for deposits, withdrawals, and transactions. Ecosystem size deals with the number of active, under development, or planned projects within the defined virtual boundaries.

Multiple factors determine the price of a transaction. Balancing them is indeed a challenge, but Ethereum L2s are getting along just fine to back the predicted market cap. It entails the efficiency of data posting, data compression, and proving costs, among others. EIP-4844 has slashed the cost of a transaction, resulting in significant savings for ORUs.

The introduction of EVM compatibility improved the developer experience. It allows developers to port several features to L2 from Ethereum. This encompassed developer libraries, tooling, and smart contract code. This benefited L2 since Ethereum had, and continues to have, a big developer base.

However, there is a rising concern that EVM compatibility is subject to a set of restrictions. These are about blockchain capabilities for developers who are more familiar with other languages.

The user experience on L2 is built on two pillars: onboarding assets and removing them. Onboarding assets have yet to be identified as a challenge. Removing them can come with some challenges. There are instances where it has been noted that users must wait seven days before their funds can be moved back to Ethereum. These include ORU, which is in contrast to ZKU, which can take as little as an hour to do the same.

Trust assumptions fall within the range of most risky and least risky. Mantle takes a spot as the most risky, and Arubitrum is the least risky. Manta Pacific drops a rate on the graph. Trust assumptions go on to decide if assets can be accessed during an outage. They cannot be stolen, but users have to wait for their resolution. A mint transaction can be formulated only if a malicious actor manages to take over.

Ecosystem size determines how well the token performs in the market. The simple principle states that the more productive things users have to do on a blockchain, the more value it will accrue via transactions. It then affects the demand for the native token and the network effect.

Notably, the market cap of $1 trillion for Ethereum L2 by the end of 2030 is only a predicted estimate. The actual value can go up and down when the time comes.

Trevor Holman

Trevor Holman follows crypto industry since 2011. He joined CryptoNewsZ as a news writer and he provides technical analysis pieces and current market data. He is also an avid trader. In his free time, he loves to explore unexplored places.

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