Scaling Solutions on Ethereum Layer-2 Handling 5.17x More Transactions Than Base Layer
The Ethereum layer-2 (L2) landscape has witnessed a remarkable expansion over the past year, with the total value locked (TVL) on ETH L2s increasing fourfold. The demand for scaling solutions on L2s has soared as users seek to leverage the advantages they offer.
According to on-chain analytics firm Token Terminal, top ETH scaling solutions now serve a staggering nine million monthly active users, a significant 9x surge from the previous year. This exponential growth occurred during a bear market when on-chain activity on major L1s remained stagnant.
L2 solutions, built on top of the Ethereum base layer, were hailed as the solution to the scalability issue. These L2s were expected to handle the majority of low-value transactions while the base layer focused on security and decentralization.
Recent data analysis from L2Beat reveals that L2 blockchains have been able to handle 5.17x more transactions than the mainnet, with an aggregated average of 47.37 transactions per second (TPS). This is compared to the mainnet’s figure of just 11.70 TPS. The higher transaction throughput and lower fees offered by L2s have attracted decentralized applications (dApps) and resulted in a significant influx of capital.
Currently, over $23 billion is locked into L2 chains, nearly quadrupling from last year. While this amount is still lower than Ethereum’s total value locked of $39.41 billion, it reflects a growing demand for L2s.
Moreover, the expanding L2 sector is anticipated to have a positive impact on the price of ETH. Users on scaling solutions pay transaction fees in ETH, so as the demand for L2 blockspace increases, so does the demand for ETH coins.
At the time of writing, ETH is trading at $2553, with double-digit weekly gains of 10%, according to CoinMarketCap. The growing adoption and utility of L2s are likely contributing to the overall bullish sentiment surrounding Ethereum.
Analyst comment
Positive news: The scaling solutions on the Ethereum layer-2 (L2) landscape have experienced significant growth, handling 5.17x more transactions than the base layer in the last seven days. The demand for L2s has skyrocketed, attracting millions of monthly active users and resulting in a nearly fourfold increase in total value locked. This growing adoption and utility of L2s are likely contributing to a positive impact on the price of ETH, with double-digit weekly gains. As an analyst, I expect the market to continue to be bullish on Ethereum due to the expanding L2 sector.
