Ethereum-based L2s Surpass All Other Blockchains in Total Value Locked (TVL)
In a major achievement for the Ethereum ecosystem, second-layer networks built on top of Ethereum (L2s) have surpassed all other blockchains in terms of total value locked (TVL). Recently, the aggregated TVL of Ethereum-based L2 protocols exceeded that of all non-Ethereum blockchains. This achievement was highlighted by Josh Stark, a contributor to U.Today. According to Stark, Ethereum L2s currently account for $20.7 billion in equivalent value locked, while all other blockchains combined have a TVL of $19.6 billion.
Historic Milestone: Value Locked in Ethereum L2s Exceeds Non-Ethereum Blockchains
The surpassing of non-Ethereum blockchains by Ethereum L2s in terms of TVL marks a historic milestone for the Ethereum ecosystem. This achievement demonstrates the growing dominance and adoption of second-layer solutions on Ethereum, further solidifying its position as the leading blockchain platform for decentralized applications (dApps) and decentralized finance (DeFi).
Analysis: Comparing Metrics of Ethereum L2s and Non-Ethereum L1s
It is important to note that the metrics used to compare Ethereum L2s and non-Ethereum L1s are not exactly similar. For second-layer networks, the TVL refers to the sum of assets on L2, including native tokens. On the other hand, for non-Ethereum blockchains, the TVL reflects the sum of assets locked in dApps on those blockchains. Despite this difference, the achievement of Ethereum L2s surpassing non-Ethereum blockchains in TVL is significant and indicative of the growth and adoption of L2 solutions on Ethereum.
L2s Ecosystem Witnessed 330% Increase in TVL in Just One Year
The ecosystem of Ethereum L2s has witnessed tremendous growth in TVL over the past year. According to data from L2Beat, the TVL of Ethereum L2s reached an all-time high of $20.78 billion on January 2, 2024. This represents a staggering 330% increase in just one year. The growth of the L2s ecosystem highlights the demand for scalable and cost-effective solutions on Ethereum, as users and developers seek to avoid the high gas fees and congestion on the Ethereum mainnet.
Arbitrum Dominance Inches Closer to 50% in Ethereum L2 Network
Among the various Ethereum-based L2s, Arbitrum (ARB) currently holds the largest market share and is nearing the 50% dominance mark. As of now, Arbitrum accounts for a significant share of the TVL in the Ethereum L2 network. Its closest competitor, the OP Mainnet (Optimism, OP), holds a TVL market share of 28.65%, according to data from L2Beat. The dominance of Arbitrum highlights its popularity and effectiveness as a second-layer solution on Ethereum.
In conclusion, the surpassing of non-Ethereum blockchains by Ethereum L2s in TVL marks a significant milestone for the Ethereum ecosystem. The growth and adoption of L2 solutions on Ethereum have propelled the platform to the forefront of the blockchain industry. As the ecosystem continues to evolve and innovate, it is expected that Ethereum L2s will play a crucial role in scaling the network and enabling a wide range of decentralized applications and services.
Analyst comment
Positive news: Ethereum-based L2s have surpassed all other blockchains in terms of TVL, marking a historic milestone for the Ethereum ecosystem. This demonstrates the growing dominance and adoption of second-layer solutions on Ethereum, solidifying its position as the leading blockchain platform for dApps and DeFi. Despite different metrics, the achievement is significant and indicative of L2 growth and adoption. The L2 ecosystem witnessed a 330% increase in TVL in one year, highlighting the demand for scalable solutions on Ethereum. Arbitrum dominates the L2 network, further emphasizing its popularity and effectiveness. Overall, Ethereum L2s are expected to play a crucial role in scaling the network and enabling decentralized applications and services.
