Ethereum User Base Soars 9x Since 2020, Driven by L2 Scaling Solutions

• Ethereum’s daily active users surged from 250,000 in Q1 2020 to 2.25 million in Q1 2024, driven by layer-2 scaling solutions like Arbitrum and Polygon.
• VanEck predicts Ethereum could hit $22,000 by 2030, fueled by strong revenue and institutional adoption, with projected free cash flows of $66 billion.
• Ethereum’s blockchain generates triple the fees of top layer-2 networks combined, underscoring its dominance in transaction volumes and security.

The number of daily active users in the Ethereum ecosystem has risen by nine times since the beginning of 2020, thanks to the use of Ethereum and its layer-2 protocols. The daily active users of Ethereum, Arbitrum, and Polygon were over 250,000 in the first quarter of 2020, according to Bitwise.

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As of Q1 2024, the daily user number for Ethereum and its scaling solutions has reached approximately 2.25 million. This figure includes users from the newer layer-2 networks like Optimism, Base, and zkSync, which have significantly contributed to this growth. 

On June 4, the Ethereum mainnet recorded 378,000 active users, while Polygon had 1.3 million users, and the other four L2s together had around 1.5 million active users.

The introduction of Optimism at the end of 2021, zkSync mainnet, and Base in 2023 will further enhance Ethereum. In line with the same, the co-founder Vitalik Buterin has repeatedly stressed a move that is using L2s for scaling the main blockchain.

VanEck’s Price Target for Ethereum

VanEck, a crypto ETF issuer, has raised its 2030 target for Ethereum to reach $22,000 by the end of the year, citing its high revenue per user and strong accumulation across traditional financial markets and Big Tech firms, as well as its potential for growth.

The analysts anticipate the approval of spot ether ETFs for trading on U.S. stock exchanges. This development is expected to provide financial advisors and institutional investors with opportunities to benefit from the pricing and liquidity advantages characteristic of ETFs. 

The projection for Ethereum’s 2030 valuation is based on a forecast of $66 billion in free cash flows generated by Ethereum and accruing to the ETH token.

Current Market Dynamics

Ethereum, despite lower user numbers, continues to generate significant revenue, with co-founder Ryan Sean Adams describing it as a “modern miracle.” The Ethereum blockchain generates three times more fees than top layer-2 networks, and Solana combined, benefiting L2s through transaction settlement and security.

At $3,862, Ether’s price has increased 1.3% in the past day, according to the most recent data. In the event that regulators approve spot Ether ETFs, ether is predicted to reach new all-time highs.Some analysts, however, caution that investments into these new crypto ETFs may not be as robust as those in the Bitcoin ETFs.

Read Also:

• Coinbase Set to Reshape Crypto Landscape with L2 Solution Base
• Arbitrum Just Flipped Ethereum`s Daily Transactions
• Coinbase’s Base L2 Network Roadmap: No Token Issuance
• Polygon Integrates Celestia’s Data Solution for Cost-Efficient Layer-2 Networks
• How Can Layer 2 Ethereum Reach a $1 Trillion Valuation? VanEck Report Unveils Insights