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November 25, 2024
Crypto

Soaring growth of Ethereum layer-2 networks set to continue in 2023

By akohad Jan19,2023

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Ethereum layer-2 networks have gone through an explosive growth phase over the past couple of months a trend that is set to continue in 2023.

According to recent data, the leading layer-2 networks have seen an increase in daily active users which has translated into a growth in fees for the respective ecosystems.

According to analytics provider Token Terminal, Polygon leads the pack with 313,457 daily active users as of Jan. 17. Additionally, the metric spiked to over 600,000 daily active users earlier in January.

It marks a 30% increase in activity since the beginning of October 2022 which has resulted in nearly $55,000 worth of daily fees for Polygon.

Optimism has seen even faster growth with a 190% gain in daily active users over the past three months. This resulted in daily network fees of $119,475, a gain of almost 140% since the beginning of the year.

Arbitrum One currently has 41,694 daily active users, an increase of around 40% over the past three months. Daily fees on the network are just over $40,000 according to the data.

Meanwhile, data from L2 ecosystem analytics platform L2beat states that Arbitrum has a market share of 52% in terms of total value locked (TVL) which is currently $2.55 billion. It has seen a 9% increase in TVL over the past week.

Optimism, the second largest L2 network, has a TVL of $1.46 billion giving it a market share of 30%. Its collateral locked has surged by 15% over the past seven days.

The two together account for more than 80% of all the collateral locked in layer-2 platforms.

Related: Optimism and Arbitrum flip Ethereum in combined transaction volume

There has been an increase of almost 10% in TVL for all L2s over the past week, pushing it up to $4.89 billion. However, the total figure is still down 34% since its peak level in April 2022.

Nevertheless, this decline is less than half of the retreat DeFi TVL has made since its all-time high. DeFi collateral has declined by 75% since December 2021, according to DeFiLlama, suggesting that there is greater demand and momentum for layer-2 networks at the moment.