Originally published on: November 28, 2024
The Ethereum ecosystem is witnessing a surge in value, reflecting increasing investor interest in Ethereum-native assets.
Layer-2 (L2) networks on Ethereum have reached an all-time high, surpassing $51.5 billion in total value locked (TVL). This marks a remarkable 205% increase in TVL compared to just $16.6 billion in November 2023, as per L2beat data.
L2 scaling solutions play a crucial role in enhancing scalability on the Ethereum network by facilitating transactions on secondary chains, thereby reducing costs and wait times associated with the mainnet.
While the milestone signifies the maturation of the L2 industry, it also introduces risks of liquidity fragmentation, according to Alvin Kan, COO of Bitget Wallet.
Leading the pack are Arbitrum One and Base, driving the TVL past $51 billion. Arbitrum boasts over $18.3 billion in TVL, capturing 35% of the total L2 ecosystem’s TVL, followed by Base with $11.4 billion, representing over 22% of total TVL.
Arbitrum’s TVL surged by more than 12%, while Base’s saw an increase of over 11.4% in the week leading up to Nov. 28. Base achieved a record 106 transactions per second (TPS) as its TVL crossed the $10 billion mark, with total transactions surpassing 1 billion, fueled in part by meme coin craze during the current bull cycle.
The recent Ethereum Denali upgrade has provided a significant boost to L2s, stabilizing fees and leading to a 99% median transaction fee reduction for several L2s, including Starknet, Optimism, Base, and Zora OP mainnet.
The growth of Ethereum’s L2 networks is indicative of the ecosystem’s vibrancy and potential for further expansion, attracting more attention from investors seeking exposure to Ethereum-native assets.
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