Bobos & Wojaks

Get rich or die tryin

Layer-2 Networks On Ethereum Are Gaining A Lot Of Traction

ethereum-vector

According to data published on the Ethereum layer two scaling analytics and research platform, L2 Beat, on November 22, 2021, the aggregate total value locked (TVL) on Ethereum layer-2 networks such as Arbitrum, Optimism, dYdX, and others has achieved a new all-time high of $6.13 billion.

ethereum-vector

 

As Ethereum transaction gas fees continue to rise, developers and decentralised finance (DeFi) market players are increasingly resorting to layer-two networks to save money while simultaneously enjoying faster transaction confirmation.

Since the Ethereum development team successfully implemented Ethereum improvement proposal (EIP) 1559 via the London hardfork last August, transaction fees on the network have steadily increased, reaching their second-highest ever level of about $65 on November 9.

According to Etherscan’s Ethereum gas tracker, a simple ERC-20 token transfer costs more than $22 at the time of writing, while the average gas fee for token swaps on Uniswap costs nearly $70.

ethereum-layer2

In order to avoid paying high gas fees for Ethereum transactions, an increasing number of crypto market participants are turning to layer-two scaling solutions, which has dramatically increased the value of these networks.

Based on the most recent data from L2 Beat, a research and analytics platform dedicated to Ethereum layer-2 scaling issues, the total value locked (TVL) in the 16 layer-2 networks under its radar has already reached $6.13 billion.

Arbitrum, the L2 solution from Offchain Labs, presently tops the field, with a TVL of $2.67 billion and a 43.67 % market share of Ethereum layer-2. Arbitrum released its mainnet beta and opened it to developers earlier this month, as reported by BTCManager.

dYdX is second with a TVL of $975 million, Boba Network is third ($863 million), and Loopring and Optimism are fourth and fifth with VLs of $580 million and $461 million, respectively.

According to Ethereum fee burn tracker Watch The Burn, a total of 975,307 (approximately $4,094 billion) ETH has been burned since the release of EIP-1559. According to CoinMarketCap, the price of ether (ETH) is currently hovering around $4,207, with market size of $498.37 billion.