The impact of Ethereum layer-2 networks on ETH mainnet revenue and whether it reduces mainnet revenue has been discussed for some time, but crypto bank Sygnum Bank said it was too early to assess the impact.
Katalin Tischhauser, head of research at Sygnum Bank, said it was too early to assess whether Ethereum’s layer-2 networks would reduce mainnet revenue and hinder price growth.
Noting that layer-2 networks can naturally take some work away from the mainnet, Tischhauser said that the scalability of layer-2 networks could enable new types of transactions and unlock revenue opportunities for Ethereum that were previously unavailable.
“It is too early to tell whether Ethereum layer-2 networks will reduce mainnet revenue or lead to net growth on the mainnet.
It is necessary to say that it is inevitable that the Ethereum mainnet will lose revenue share to layer-2s. However, thanks to layer-2s, the ETH mainnet will be able to generate revenue in ways that were not possible before.”
Tischhauser noted that the revenue decline has negatively impacted sentiment towards Ethereum, which is likely reflected in Ethereum’s poor performance relative to Bitcoin.
New ATH May Be Near for Ethereum!
Apart from the Sygnum Bank executive, Apollo Capital CIO Henrik Andersson also assessed the impact of layer-2 networks on Ethereum.
Andersson argued that Ethereum layer-2 networks are crucial in maintaining its leadership among layer-1 blockchains by preventing users from migrating to their other chains.
Andersson noted that Ethereum’s L2 networks will drive long-term revenue growth by enabling higher transaction volumes and attracting institutional investment, helping Ethereum regain its share.
Andersson recently predicted that the price gap between Ethereum and Bitcoin (BTC) could narrow, potentially leading to ETH reaching a new ATH by early 2025 or soon after.
*This is not investment advice.
