Originally published on: November 07, 2024
Ethereum’s network fees are on the verge of a significant rebound as activity on layer-2 (L2) scaling networks continues to rise, driving the demand for data storage. According to cryptocurrency researchers and onchain data, the surge in transaction data on Ethereum’s L2s is three times higher than in March, signaling a positive trend for network revenues.
Following the March DeCun upgrade, Ethereum’s revenues plummeted by up to 95% as L2 transaction data was moved to temporary offchain stores known as “blobs” to reduce costs for users. However, recent data suggests a shift in this trend, with popular L2s like Base, Scroll, and World Chain filling up available capacity and driving fee revenues higher.
VanEck’s head of digital asset research, Matthew Sigel, predicts that Ethereum could generate up to $66 billion in annual free cash flow by 2030, potentially pushing the price of Ether to $22,000 per token. This projection takes into account the increasing value accrual to ETH holders from transaction fees as Ethereum handles a growing share of global transactions.
In addition to transaction fees, Ethereum’s value accrual mechanisms include “burning” a portion of fees and rewarding stakers with new ETH for securing the network. With the potential for new staked ETH ETFs entering the market, Trump’s recent win in the US presidential elections could further boost interest in crypto investing products, including those based on Ethereum.
While Ethereum remains a dominant player in the data availability space, other protocols like Celestia, EigenDA, and Avail are also vying for a piece of the pie. As the crypto market continues to evolve, staying informed and making smart decisions is key to navigating this rapidly changing landscape.
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