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Galaxy Research: The vast majority of Bitcoin Layer2 networks will not survive

Galaxy Research: The vast majority of Bitcoin Layer2 networks will not survive

Bitget2024/08/04 01:21

PANews reported on August 4th that GalaxyResearch stated in a report that the vast majority of Bitcoin rollups will be unsustainable. Due to transaction fees, Bitcoin Rollups need millions of dollars per year to maintain. Galaxy wrote: "Each individual data release transaction can occupy up to 400KB (0.4MB) of block space, actually occupying 10% of the entire block." As there will be multiple Rollups, it is expected that data will be released every 6 to 8 blocks, and Rollups may quickly push base layer costs to new highs and make small transactions too expensive. Given the competition for block space, only the Rollup that can generate the most fee income and pay for block fees can sustain operations.

Galaxy estimates that in a low-fee environment when ordinary transaction costs are at 10 sat/VB, rollup will generate $460,000 in monthly fees to maintain Bitcoin's security. When Ordinals or tokens minted through Runes or BRC-20 standards are frequently active, a high-cost environment of 50 sat/VB could lead to monthly costs reaching $2.3 million.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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