According to Van Eck analysts, Ethereum's layer 2 scaling networks are projected to achieve a market capitalization of $1 trillion within six years. These layer-2 blockchains are positioned to address Ethereum's primary challenge of limited capacity for data processing, storage, and computation. Van Eck's senior digital assets investment analyst Patrick Bush and digital assets research head Matthew Sigel arrived at this projection by estimating Ethereum's market share dominance across all public blockchains and assessing the assets volume within the Ethereum ecosystem.

Currently, there are 46 Ethereum L2s with a total value locked of $39 billion, with Arbirtum being the largest at $18 billion. The analysts highlighted Ethereum's struggle with scalability in smart contracts due to increasing transaction fees and processing times during heightened network usage. Ethereum's ongoing development efforts are geared towards enhancing its ability to handle transaction data in layer-2 networks, exemplified by the recent Dencun update which aimed to reduce L2 transaction fees through a data-saving feature called "Blobs."

Van Eck suggests that the revenues generated by L2s have the potential to surpass Ethereum's revenue numbers, as L2s offer superior transaction throughput and user experience. Despite acknowledging intense competition within the L2 market, the analysts express caution regarding the long-term value of many L2-related tokens. They anticipate a future landscape with numerous specific-use L2s alongside a few major players in the general-purpose L2 market. Additionally, the analysts predict that most roll-ups will eventually transition to the zero-knowledge framework (ZKU) for its numerous advantages.

The Van Eck analysts foresee the emergence of thousands of use-specific L2 networks segmented by sector, application, or function. Some chains will be tailored for specific purposes, such as decentralized social media-specific L2 networks with corresponding apps. The influence of the network effect, where blockchains gain value as user numbers increase, is expected to consolidate the position of a handful of general-purpose L2 chains.