Ethereum Scaling Solutions Surpass Mainnet By 48%
Activity on Layer 2 networks has surged to new all-time highs, with mixed L2 exercise beating out mainnet Ethereum transaction quantity by 48% on Thursday.
More than 1.54M transactions had been executed on Layer 2 networks up to now day, in comparison with 1.04M on Ethereum, in accordance with Orbiter Finance. L2 transactions beforehand peaked at 1.52M on Feb. 22.
The knowledge exhibits that Ethereum customers are more and more migrating onto Layer 2 scaling options, which supply quicker and cheaper transactions in comparison with Ethereum’s mainnet.
Arbitrum One, the main Layer 2, beat out Ethereum’s quantity alone with 1.08M transactions. Optimism ranked second with 267,288 transactions, adopted by Arbitrum Nova with 52,070, and zkSync with 49,410.
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Ethereum charges have remained comparatively low for the previous 9 months, typically averaging between $2 and $6 since mid-2022, in accordance with BitInfoCharts. But charges abruptly tripled amid the chaos brought on by the USDC stablecoin de-pegging over the weekend, highlighting Ethereum’s want for a sturdy Layer 2 ecosystem.
Average transaction charges trended between $20 and $60 on the peak of the bull market in This fall 2021.
Capacity Constraints
Nick Bishop, director of NotCentralised, a web3 enterprise studio, mentioned that whereas Ethereum is great at offering safety, additionally it is “capacity constrained.”
“L2s have a natural tailwind from rising DeFi usage,” Bishop continued. “As the usage of tokens expands into high volume, real-world ecosystems, higher throughput is essential.”
Daniel Bar, the founding father of enterprise capital community Bitfwd Capital, mentioned the spike in L2 exercise marks a brand new period of L2-focused blockchain improvement.
“The maturation of the various L2s, particularly Arbitrum and Optimism, set a trajectory for multichain L2 ecosystems to flourish on their own,” Bar mentioned. “We can expect this trend to grow exponentially in the next bull run as more users flood the products that are getting built on these L2s.”
Layer 2 Adoption
Layer 2 networks now safe $6.6B in whole worth locked (TVL), in accordance with L2beat. That equates to 14% of general DeFi TVL and 23% of Ethereum’s DeFi TVL, in accordance with knowledge from DeFi Llama.
The sector is dominated by Arbitrum and Optimism, which symbolize 86% of its TVL. Both are optimistic rollup networks. Rollups work by bundling collectively transactions on Layer 2, after which submitting them to the Ethereum mainnet for finalization.
Optimistic rollups had been quick to realize market share due to their compatibility with the Ethereum Virtual Machine, Ethereum’s core good contract engine. However, mainnet withdrawals are sluggish, requiring a 7-day delay due to the fraud prevention strategies employed by optimistic rollups.
Competing With ZK Technology
Arbitrum and Optimism might quickly face stiff competitors from a brand new technology of EVM-compatible rollups secured by zero-knowledge proofs (zkEVMs). Proponents tip that zkEVMs will provide quicker finality and enhanced safety ensures in comparison with optimistic options.
Polygon, Matter Labs, Scroll, and Consensys will every launch a mainnet zkEVM within the coming months, with Polygon’s zkEVM anticipated to reach first on March 27.
Bishop expects the rising adoption of Ethereum L2s will undermine the worth proposition of low-cost EVM-compatible Layer 1 networks and drive them to both “morph into L2s or die.”
“No chain has surpassed Ethereum in ecosystem breadth and flexibility of smart contract deployment,” he continued. “Ethereum will sink further down in the web3 tech stack to a foundational, secure set of rails on top of which L2, L3, and L4 iterations will flourish.”
