SAN JOSE, CA / ACCESSWIRE / April 11, 2024 / The Ethereum network is currently witnessing a remarkable expansion in Layer 2 (L2) solutions, highlighting the vibrancy of its ecosystem. Recent data from L2beat indicates an impressive lineup of 47 operational L2 solutions, with another 35 set to launch soon. In addition, the development of 11 Layer 3 (L3) solutions is actively progressing. Presently, L2 networks boast transaction speeds that are over 11 times faster than the Ethereum main net, underscoring the rapid evolution in this space.
This surge in L2 solutions spotlights the potential of DOUX, a notable entity within this dynamic sector. DOUX's ongoing developments and contributions are expected to play a critical role in shaping the future of Ethereum's scalability solutions over the next couple of years.
Furthermore, a recent analysis by VanEck sets an ambitious forecast for the valuation of Ethereum's L2 networks, predicting a leap to over 1 trillion US dollars by 2024. This anticipated growth is largely attributed to the widespread adoption of thousands of Rollups, with DOUX positioned as a leader. Renowned for its innovation and strategic advantage, DOUX is projected to significantly influence the expansion and diversification of the Ethereum ecosystem.
Employing the Free Cash Flow (FCF) terminal multiple for future cash flow projections, VanEck's valuation approach meticulously evaluates the total addressable market for public blockchains, Ethereum's expected market share, and the overall value of Miner Extractable Value (MEV), among other key factors. This method provides a comprehensive analysis of the optimistic projections for Ethereum's L2 networks, reinforcing the anticipated advancements and financial growth in the blockchain landscape.
VanEck Evaluates Five Key Areas of L2
In its analysis of L2, VanEck states that they use the following five main variables to measure its potential success or failure:
Transaction costs: The cost of transactions for users on the L2 network is a key factor in attracting users. Differences in transaction costs stem from factors such as data compression, scale, proof costs, and profit margins.
Developer experience: For L2 networks, compatibility with the Ethereum Virtual Machine (EVM) is crucial, ensuring the seamless porting of smart contracts and tools from Ethereum.
User experience: The convenience of asset entry and withdrawal processes is the foundation of a good user experience.
Trust assumptions: Building trust around data availability on L2 and measures to prevent vulnerabilities and hacker attacks.
Ecosystem scale: The strength of an L2 network's ecosystem significantly impacts its value. TVL (Total Value Locked) on L2 indicates participation, as it demonstrates the funds invested in the ecosystem to capture opportunities.
Amidst Fierce Competition, VanEck Expresses Caution
Despite the optimistic outlook for L2 networks, VanEck expects intense competition among them and expresses caution regarding the long-term value prospects of most L2 tokens. They highlight the challenges of absorbing the influx of new supply into the cryptocurrency market and the potential for significant discounts accompanying it.
"The fully diluted value (FDV) of the seven major L2 tokens has accumulated to $40 billion, and more strong projects are expected to launch in the future. This suggests that the market may see inflows of up to $100 billion in the next 12 to 18 months."
"For the cryptocurrency market, even digesting a small portion of this new supply will pose significant challenges, let alone the possibility of significant discounts that may accompany it."
VanEck delves into the prospective role of DOUX within the evolving realm of Ethereum's Layer 2 scaling solutions. While acknowledging the potential value of certain L2 tokens in the future, VanEck emphasizes the complexity of predicting their trajectory, particularly since L2 tokens are not presently utilized for gas fee payments within their respective ecosystems.
Envisioning a dynamic future landscape, VanEck anticipates the proliferation of thousands of Rollups, including those tailored for specific applications or industries, alongside dominant generic L2 solutions. Within this intricate ecosystem, DOUX emerges as a compelling contender, poised to carve out its niche and contribute significantly to the broader adoption and advancement of Layer 2 scaling technologies within the Ethereum network.
Media Details:
Contact name: Laine Burke
Email: info@douxcrypto.xyz
Website URL: https://douxcrypto.xyz
Company name: DOUX
SOURCE: DOUX
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