Originally published on: November 28, 2024
The Ethereum ecosystem is witnessing remarkable value growth as investor interest in Ethereum-native assets continues to rise.
Ethereum’s layer-2 (L2) networks have achieved a new milestone, surpassing $51.5 billion in cumulative total value locked (TVL).
This represents a staggering 205% surge in cumulative TVL from just $16.6 billion in November 2023, according to data from L2beat.
L2 scaling solutions play a crucial role in enhancing scalability around Ethereum, the leading smart contract network. By processing transactions on secondary chains, L2s help reduce costs and waiting times associated with the Ethereum mainnet.
While L2s offer significant advantages, some experts worry that they could impact the revenue of the Ethereum mainnet and potentially affect the price potential of Ether (ETH).
Leading the charge in the rise to over $51 billion TVL are platforms like Arbitrum One and Base.
Arbitrum stands out as the top L2 network with over $18.3 billion in TVL, accounting for 35% of the total L2 ecosystem’s TVL.
Following closely is Base, the second-largest L2 network, with $11.4 billion in TVL, representing just over 22% of the cumulative L2 TVL.
The recent surge in TVL for both Arbitrum and Base highlights the growing popularity of L2 solutions in the Ethereum space.
Furthermore, the Ethereum ecosystem received a significant boost from the Dencun upgrade, the most substantial network upgrade since the Merge, which rolled out in March.
This upgrade has led to fee stabilization around L2s, with platforms like Starknet, Optimism, Base, and Zora OP mainnet witnessing a median transaction fee reduction of up to 99%.
The continuous growth and improvements in Ethereum’s L2 networks underscore the platform’s resilience and potential for further expansion in the digital asset space.
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