The analyst believes that the Layer 2 segment is one of the most hopeful in the crypto market because it brings together two aspects that are essential for the success of a sector: having large funding from institutional investors and the entire architecture of the largest blockchain today, to Ethereum, which has been shaping up to expand its usability. “The first aspect becomes evident as the Layer 2 segment received more than US$840 million this year from institutional investors, an amount greater than that recorded in all previous history. The adaptation process of Ethereum, on the other hand, becomes visible by the expectation of its next updates”, he highlights. Keep in mind that more companies will adapt crypto as a payment. For instance, crypto payments allowed for TikTok and other entertainment services & platforms. That’s why it’s a big trend currently going on.
Highlighting the current moment of Ethereum, Rafael points out that The Surge will be focused on developing the necessary structure for rollups, by reducing operating costs for the end user. “We should see a cost reduction in the use of this technology over the course of 2023 by up to 100 times, which will boost its adoption by most users,” he points out.
Still, according to the expert, it is important to highlight the high development activity in these ecosystems. Data from a recent study carried out by Alchemy showed that ecosystems such as Polygon , Arbitrum and Optimism experienced moments of intense developer growth in 2022 and, therefore, are attracting the attention of the market.
Polygon: experienced 335% growth in active developer teams in 2022; 804% growth in active developer teams within one year; and 153% year-to-date growth in API consumption;
Optimism: 1000% growth in active dev teams in 2022, 1000% increase in active dev teams over the year, and 1000% growth in API consumption YTD;
Arbitrum: 516% growth in active developer teams in 2022; 795% growth in active developer teams within one year; and 121% year-to-date growth in API consumption.
Castaneda adds that these characteristics may have been one of the factors that contributed to the creation of significant applications in these ecosystems in the last year, which did not happen in ETH, such as Lens Protocol and GMX.
Venture capital funds are watching
The analyst points out that in the first half of 2022 alone, US$0.84 billion was invested in rollups, an amount that is higher than the rest of the capital invested since the beginning of the industry. “This data shows that both the applications will continue to develop in the coming years, without the need for an atypical growth in the crypto market, and they will also have enough capital to develop the best teams in the market”, he says.
It is worth remembering that the above analysis is not an investment recommendation, but perspectives of what may happen in the next year, having only an informative nature with the aim of spreading knowledge about the cryptocurrency market.