Ethereum Layer Two Solutions To See Continued Rise in 2023

The year 2022 has seen a lot of activities taking place within the crypto ecosystem. Starting from the bearish sentiments, to encountering crypto crash in May, followed by halting of withdrawal services from various crypto exchanges around the world to the most historic event of crypto following the introduction of BTC in 2009; The Merge. Not only did the transition of the Ethereum Network from Proof of Work to Proof of Stake resulted in it becoming more efficient, it also singlehandedly catered towards reducing its energy usage by 99.9%! A massive feat by any organization!

With the changes that has been brought into the crypto community following the Ethereum Merge have set the network up for surpassing Bitcoin, after 2021; as expressed by many crypto experts. The increasing volume of NFTs have also played a part in the leading layer-2 networks on Ethereum to see a surge in daily active users and fees in recent times. This explosive growth phase that the Ethereum layer-2 networks have gone through over the past couple of months is a trend that is set to continue in 2023.

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As seen in the data recently, the surge in activities in the layer 2 networks have also translated into a growth in fees for the respective ecosystems. Token Terminal, an analytics provider platform, recently saw that Polygon (MATIC) has been leading the pack with 313,457 daily active users as of January 17, 2023. This was a metric that spiked to almost over 600,000 daily active users earlier in January; which is a huge increase in activity since the beginning of October. This 30% increase in activity on Polygon has resulted in nearly $55,000 worth of daily fees for Polygon!

⛓️🌉⛓️ State of Ethereum L2s ⛓️🌉⛓️

💸 Daily fees / 👥 DAUs:@arbitrum: $40.2k / 41.7k@optimismFND: $119.5k / 72.9k@StarkNetEco: $3.0k / 2.7k@0xPolygon: $54.5k / 313.5k pic.twitter.com/eAh1l6YVoS

— Token Terminal (@tokenterminal) January 18, 2023

Apart from Polygon, other Layer 2 networks that have seen a surge in activities are Optimism and Arbitrum One. As Polygon has seen a rise in growth, Optimism’s growth has been even faster. The network has seen a 190% gain in daily active users over the past three months. The rise in the activities have resulted in Optimism’s daily network fees of $119,475, which is a surge in gain of almost 140% since the beginning of the year. As for Arbitrum One, the network currently has 41,694 daily active users, which is an increase of around 40% over the past three months. According to the data, the daily fees on the network are just over $40,000.

Apart from this, L2beat, the L2 ecosystem analytics platform has shown data that Arbitrum One has a market share of about 52% in terms of total value locked or TVL, which is currently standing at a value of $2.55 billion. Since last week, the Aribtrum One network has seen a 9% increase in TVL!

Source: L2beat

While Optimism, which is the second-largest L2 network, has a TVL of $1.46 billion, that gives it a market share of 30%. The network has see a rise in its TVL of about 15% over the past seven days. These two L2 networks together account for more than 80% of all the collateral locked in layer-2 platforms!

Source: L2beat

The rise has been steady in January, for L2 network activities, however, that figure is still down by about 34% since its peak in April of 2022.

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Source: Cointelegraph