Layer 2 Protocols to Gain From Cancun Ethereum EIP-4844 Upgrade

• IMX, OP, ZkSync, MATIC, METIS, STRK, and ARB are to benefit from the Cancun upgrade.
• Deutscher ranked projects on long-term perspective and their investment potential.
• The analyst categorized the project into groups A, B, C, and D, based on individual performance.

Analyst Miles Deutscher predicted that the best Layer 2 protocols will gain from the Cancun Ethereum EIP-4844 upgrade. Deutscher also ranked projects on long-term perspective and their investment potential. The analyst categorized the project into groups A, B, C, and D, based on individual performance.

Immutable X (IMX)

Deutscher believes the underpinning factor of the Immutable X ecosystem is its robust gaming and NFT focus. According to him, the $260 million raised by the project means they are reasonably well-funded. Deutscher thinks the project has suffered from the impact of the niche in which it belongs. That is the NFT gaming industry which is taking time to develop. In his categorization of the projects into groups A, B, C, and D, with a representing the highest rank, Deutscher ranked Immutable X in category C.

Optimism (OP)

Deutscher praised Optimism for the network effect it has attracted over a short period. He explained that using the protocol’s transactions per day metrics is high compared to other Layer 2 protocols. With $178.5 million in funding, Deutscher considers Optimism’s investment status impressive. He noted the project is working with Coinbase, and major parties use their development stack. For these reasons, Deutscher ranked Optimism in category B.

ZkSync (ZkSync)

Deutscher included the yet-to-be-launched ZkSync protocol in his analysis. He focused on the project’s product side since it had not launched. ZkSync raised over $458 million in funding, qualifying it as an absolute behemoth. According to him, almost every venture capitalist in the crypto space is backing ZkSync, and its total value locked (TVL) is over $170 million. Deutscher ranked ZkSync in category A, believing that Zk-rollups are the future.

Polygon (MATIC)

According to Deutscher, ranking Polygon is complicated. However, he acknowledged the recent $450 million funding acquired by the protocol as a positive development. He noted the criticism faced by the project after claims of burning through a couple of hundred million dollars of their runway. That got people worried about whether Polygon could keep up with its competitors.

Deutscher believes Polygon is performing well despite dips in TVL, transactions, and other metrics. He also believes Polygon remains a big player in the gaming industry considering its ecosystem’s size within that space. He ranked Polygon in category B.

MetisDAO (METIS)

Deutscher said he included Metis in the least due to its impressive social capital. Despite its size, Metis has been discussed often enough to be considered among the analyzed coins, according to Deutscher. The analyst acknowledged that Metis’ funding is low, and the project does not have many backers. However, he believes that Metis’ pure price percentage gain puts it above some of the competitors in the analyzed set. Using the protocol’s investment metrics, Deutscher listed Metis in category C. 

StarkNet (STRK)

According to Deutscher, StarkNet has raised $8 billion in valuation. With that amount, he expects their airdrops to be one of the biggest ever seen in the crypto industry. Deutscher sees a lot of potential in StarkNet based on its valuation. However, he notes that at face value, the project has not done much as fundamental metrics like TVL and transaction volumes are low on the network. He ranked StarkNet in category B.

Arbitrum (ARB)

Deutscher noted that Arbitrum accrued a lot of TVL from the numerous Dapps deploying on its ecosystem. He acknowledged the project’s robustness by not dropping in usage after executing an AirDrop. In funding, Deutscher considers Arbitrum’s $123.7 million volume a decent return. The Crypto Banter host ranked Arbitrum in category A.