VanEck, a major financial entity based in New York, has shared insights into Ethereum’s layer-2 (L2) solutions. The firm projects a $1 trillion valuation for L2s, highlighting their potential to outperform Ethereum. L2 technologies, such as zero-knowledge roll-ups (ZKUs) and optimistic roll-ups (ORUs), address scalability by processing transactions off the main blockchain. This could position them to exceed Ethereum in revenue generation, given the main blockchain’s transaction limitations.

Despite the optimistic outlook for L2s, VanEck maintains a cautious stance on most L2 tokens. The firm reasons that these tokens do not serve as the primary currency within the crypto ecosystem. However, it acknowledges the emergence of roll-ups catering to niche applications, including social media networks. VanEck identifies Optimism, Arbitrum, and Blast as leading L2s, attributing their success to vibrant ecosystems and strategic airdrops.

VanEck Highlights Airdrops’ Role in Ethereum L2 Success

Arbitrum, Blast, and Optimism have emerged as significant players in the L2 space, according to VanEck. Their development of engaging ecosystems has been crucial to their success. These achievements align with the effective use of airdrops, which have drawn considerable interest from the crypto community. DefiLlama data reveals that Arbitrum ranks fifth in total value locked (TVL) with $3.18 billion. Blast and Optimism follow, securing the sixth and eleventh spots, respectively.

VanEck evaluates L2 success using various criteria, including transaction costs and user experience. The firm also considers trust assumptions, ecosystem size, and developer experience. These metrics help in assessing the growth and adoption of L2 solutions. 

Regulatory Caution Affects Ethereum ETF Applications

The regulatory environment continues to influence the crypto sector’s trajectory. Recently, the SEC postponed its decision on VanEck’s spot Ethereum ETF application. This delay, extending the verdict timeline to May 23, 2024, reflects ongoing regulatory caution. The SEC’s hesitancy mirrors broader uncertainty surrounding Ethereum-based ETF applications.

Meanwhile, Ethereum co-founder Vitalik Buterin revisited the concept of layer-3 (L3) solutions. He emphasized that different layers should serve distinct purposes for a layered approach to be effective.

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Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. I write extensively on topics such as blockchain, cryptocurrency, tokens, and more for many publications. My goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.