Ethereum (ETH) Will Continue Outperforming Layer-2 Tokens Like Arbitrum, Optimism, and Others in the Months to Come, Analyst Insists

The chatter of when Ethereum-based altcoins will flip Ethereum has been constant for years. Even with the rise of DeFi, which propelled market leaders like Uniswap, Maker, Aave, and other top-tier projects, Ethereum remains unchallenged at second, only tracking the world's most valuable platform, Bitcoin.

As Ethereum (ETH) continues to dominate the crypto market, some analysts are debating whether layer-2 (L2) tokens like Arbitrum (ARB) and Optimism (OP) will eventually outpace ETH in terms of performance.

However, one analyst believes that ETH will continue to stretch gains over L2 tokens.

In a recent analysis, the founder of JustDeauThis highlighted several key advantages of ETH over L2 tokens.

According to the analysis, despite the benefits of building on L2 solutions, there are still many who believe that ETH, as a token, has more utility than L2 tokens and could continue outperforming them over the years.

The analysis builds a case for why ETH might continue outperforming L2 tokens like Arbitrum, Optimism, and others in the coming months.

The analysis highlights strong financial metrics for ETH, including a 365-day Price/Sales (P/S) ratio of 156, compared to 194 for L2 tokens (fully diluted).

Additionally, ETH is deflationary with a -0.28% deflation rate last year and largely remaining deflationary this year, while L2 tokens are inflationary with millions or billions of tokens being unlocked or set for release.

The analysis also notes that while L2 tokens offer lower gas fees and faster transactions, these benefits are capped by the rate of token unlocks and dilution.

On the other hand, as ETH burns via EIP-1559 and the network gains more adoption, the value of ETH could continue rising.

Moreover, ETH has a broader range of functionalities compared to L2 tokens, such as rewarding validators with gas fees and being used as a base currency for on-chain products like NFTs and decentralized money markets.

The analysis concludes by discussing the potential impact of spot Ethereum ETFs, which would allow institutions to gain exposure to ETH.

As billions pour into the coin, the gap between ETH and L2 tokens and even top altcoins will only increase.

However, despite Ethereum’s dominance, the role of L2 platforms is seen as being complementary, with Ethereum and L2 solutions coexisting and offering faster and cheaper transactions for specific use cases.

News source：https://www.kdj.com/cryptocurrencies-news/articles/ethereum-eth-continue-outperforming-layer-tokens-arbitrum-optimism-months-analyst-insists.html

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