Ethereum Layer 2 network sets new record.

Total value locked (TVL) on the Ethereum layer-2 network recently hit an all-time high in January, demonstrating the continued adoption of Ethereum. The layer 2 network sits on top of the Ethereum blockchain and helps it scale by processing off-chain transactions before sending data back to the underlying blockchain.

According to data from L2BeatTVL for these scale-out solutions, a layer 2 analytics platform, recently hit an all-time high of $21.16 billion, up 340% from the same day last year.

The Ethereum Layer-2 network has reached a new milestone.

2023 was a good year for Ethereum. This is because altcoins and scaling solutions have recorded a steady increase in TVL. fierce competition On other networks such as Solana and Cardano. According to data from L2Beat, TVL for these scale-out solutions started 2023 at $4.81 billion but has grown steadily to $19.98 billion by the end of the year, a 315% growth.

This growth worsened particularly in the fourth quarter of 2023 and continued into 2024. TVL increased by $1.18 billion in the first three days of January, reaching an all-time high of $21.16 as of January 3.

At the time of this writing, TVL is currently worth $20.41 billion, still up 3.82% over the past seven days. A significant portion of this layer 2 TVL is: decision 1There is currently $10.05 billion worth of cryptocurrency locked up in the scaling solution.

ON mainnet, formerly called Optimism, is currently in second place with a TVL of $5.84 billion. 57% of this TVL consists of OP tokens, while Arbitrum One’s ARB tokens make up only 36% of TVL.

ETH price holds $2,200 | Source: ETHUSD on Tradingview.com

ETH network status

This massive growth shows that Ethereum users are flocking to layer 2 networks to avoid high gas fees and congestion on the mainnet. Ethereum’s TVL also saw steady growth throughout the year, adding $7.6 billion in the fourth quarter of 2023. DeFiLlama It shows that Ethereum’s TVL is currently $28.532 billion.

However, Ethereum has seen a sharp decline in the number of daily active addresses and transactions over the past few months. Source of data Artemis It said the network is currently surpassing Solana and Sui in terms of number of daily transactions. Solana’s Recent Competition He urged the analyst: Explaining Ethereum Relying too heavily on layer 2 networks for scalability is like digging your own grave.

Some layer 2 chains are currently processing more transactions than Ethereum itself. L2BEAT stores monthly transactions in zkSync Era and decision They surpass Ethereum’s 33.91 million transactions with 39.91 million and 35.54 million transactions, respectively.

Featured image from Yahoo Finance, chart from Tradingview.com

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