Originally published on: November 07, 2024
Cryptocurrency experts and onchain data suggest that Ethereum’s network revenues are set to bounce back as the use of layer-2 (L2) scaling networks increases demand for data storage.
Recent data from Dune Analytics reveals that Ethereum’s L2s have been transmitting three times more transaction data to the mainnet daily in November compared to March.
Following Ethereum’s March Dencun upgrade, which shifted L2 transaction data to temporary offchain stores known as “blobs,” network revenues plummeted by up to 95%. However, there are signs of improvement as L2s like Base, Scroll, and World Chain show promising activity.
VanEck’s head of digital asset research, Matthew Sigel, believes that Ethereum could generate up to $66 billion in annual free cash flow by 2030, potentially driving the Ether token price to $22,000. This projection is based on the network’s increasing role in global transactions, surpassing the likes of PayPal and approaching networks like Visa.
In addition to transaction fees, Ethereum utilizes mechanisms like “burning” transaction fees and rewarding stakers with new Ether to enhance value accrual for ETH holders.
The recent 10% surge in ETH prices following Donald Trump’s victory in the US presidential elections suggests growing interest in crypto investments. This could open doors for staked ETH ETFs and other investment products in the US market.
While Ethereum faces competition from protocols like Celestia, EigenDA, and Avail in data availability, the network’s potential for growth and value creation remains robust.
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