After plunging roughly 30% from 2023 highs, ethereum appears to be bouncing off the wells of the crypto winter. Looking at the candle arrangements on the daily and weekly charts, the coin has major support around $1,500 and is firm, bouncing with decent trading volume.
At spot rates, eth is up approximately 3% following positive developments brought about by the growing adoption of its layer 2 scaling solution and the recent news that VanEck, a player that manages billions of assets, is preparing to launch an ethereum derivative product.
ethereum Layer-2 Solutions Explode
On X on September 28, Alex Masmej, the founder of Showtime, believe that ethereum‘s layer 2 ecosystem has expanded to such an extent that “it no longer makes sense to build on other platforms.”
The development and deployment of ethereum layer 2 solutions took center stage following network congestion, which forced gas fees to rise to record levels in the last bull run.
The developers have responded to the request of the network’s co-founder, Vitalik Buterin. The expert believes that secure and universal platforms are being quickly built and implemented and have gained wide popularity.
Layer 2 platforms aggregate transactions off-chain before confirming them on-chain, allowing for faster, more cost-effective operations while benefiting from the security of ethereum. As of September 28, there were on 827,000 validators whose job is to confirm transactions and ensure the network is secure, thanks in part to its geographic distribution.
Most Layer 2 solutions use optimistic rollups, including Arbitrum, Base, and OP Mainnet. However, Masmej also said that once ZK rollups, which use zero-knowledge proofs to validate transactions without revealing sensitive data, are available, the scalability trilemma will end, further boosting the capabilities of Layer 2 solutions.
In the founder’s opinion, high-yield options, including Solana, will be a hedge. At the same time, Cosmos, which drives blockchain interoperability, will act as a source of inspiration in the long term. Meanwhile, ethereum will continue to flourish as Layer 2 options gain traction.
Complex Product Launch TVL and eth Rising
According to l2Beat data, popular solutions like Arbitrum and Base, which offer faster and cheaper processing environments while remaining coupled with ethereum and enjoying the fast-moving advantage of the first-mover network, have a larger total value locked (TVL). As of September 28, Layer 2 platforms had a TVL of more than $10.6 billion, more than the market capitalization of Solana, which remained to $8 billion, according to CoinMarketCap.
Beyond Layer 2 adoption, eth is being catalyzed by the ethereum-Futures-ETF-EFUT” target=”_blank” rel=”nofollow”>news that VanEck, a global asset manager, is preparing to introduce its ethereum futures exchange-traded fund (ETF). Specifically, the VanEck ethereum Strategy ETF (EFUT) will invest in eth futures contracts provided by exchanges approved by the Commodity Futures Trading Commission (CFTC).
Like the bitcoin futures ETF product, which is already offered, the ethereum derivative product will allow institutions to gain exposure, increasing liquidity.
Featured image from Canva, TradingView chart
