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The complete worth locked (TVL) on Ethereum layer-2 networks just lately hit a brand new all-time excessive in January, a testomony to the continued adoption of Ethereum. Layer 2 networks sit on prime of the Ethereum blockchain and assist scale it by processing transactions off-chain earlier than sending information again to the principle blockchain. 

According to information from L2BEAT, a layer-2 analytics platform, the TVL on these scaling options just lately reached an all-time excessive of $21.16 billion, representing a 340% development from the identical day final yr. 

Ethereum Layer-2 Networks Hit New Milestone

2023 was a terrific yr for Ethereum, because the altcoin and its scaling options registered a gentle enhance in TVL regardless of strong competition from different networks like Solana and Cardano. Data from L2Beat exhibits the TVL on these scaling options began in 2023 with $4.81 billion however grew steadily all through to finish the yr at $19.98 billion {dollars}, a 315% development. 

This development was significantly exacerbated within the final quarter of 2023 and continued into 2024. The TVL grew by $1.18 billion within the first three days of January to succeed in $21.16 on January 3, its present all-time excessive.

At the time of writing, the TVL is now at $20.41 billion, nonetheless up by 3.82% up to now seven days. A massive fraction of this layer-2 TVL might be attributed to Arbitrum One, with the scaling answer presently having $10.05 billion value of cryptocurrencies locked. 

OP Mainnet, previously known as Optimism, is second with a present TVL of $5.84 billion. 57% of this TVL consists of OP tokens, in comparison with Arbitrum One, whose ARB token constitutes solely 36% of the TVL. 

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

State Of The ETH Network

This large development exhibits that Ethereum customers are flocking to layer 2 networks to flee excessive fuel charges and congestion on the mainnet. Ethereum’s TVL additionally witnessed regular development all year long, including $7.6 billion within the final quarter of 2023. Data from DeFiLlama exhibits the TVL on Ethereum is now at $28.532 billion.

However, Ethereum has seen its every day energetic addresses and transaction depend plunge in the previous couple of months. Data from Artemis revealed the community is presently being surpassed by Solana and Sui when it comes to every day transaction depend. (*2*) prompted an analyst to describe Ethereum as digging its personal grave by relying an excessive amount of on its layer-2 networks for scalability.

Some layer-2 chains are additionally presently processing extra transactions than Ethereum itself. L2BEAT places the month-to-month transactions on zkSync Era and Arbitrum at 39.91 million and 35.54 million respectively, forward of Ethereum’s depend of 33.91 million transactions.

Featured picture from Yahoo Finance, chart from Tradingview.com

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