- The overall L2 sector reached an ATH in terms of daily active users.
- Arbitrum outperformed other networks, but the token did not experience comparable growth.
As optimism increased in the crypto sector, Layer 2 grew [L2] space showed the most growth during this period. Especially the daily active users of Ethereum [ETH] L2 soared to unprecedented levels, surpassing 800,000 at the time of writing.
This remarkable growth indicated increasing interest and adoption of Layer 2 solutions, indicating a positive trend in the platform’s scalability and user engagement.
As more users adopt Layer 2 for improved transaction speed and lower costs, the industry is poised for substantial expansion. This could result in a robust ecosystem in the coming years.
The amount of #Ethereum L2 users reached an all-time high of over 800,000 daily active users!
This number is expected to grow to at least 10 million daily active users by 2024 and 2025. pic.twitter.com/YrwlAiBADj
—Leon Waidmann | Insights into the chain🔍 (@LeonWaidmann) December 4, 2023
L2s on the rise
Due to the enormous potential of this sector, new competitors have emerged in the space. Some of them have even managed to surpass protocols that have existed in the industry for quite some time.
For example, ZkSync Era outperformed all other solutions in terms of daily operations. Even in terms of number of transactions, zkSync Era did well.
Arbitrum comes in second [ARB] managed to turn around zkSync in terms of transactions and came close to reaching the same level of activity. However, optimism [OP] and Base failed to generate similar activity levels over a consistent period of time.
What the statistics suggest
Analyzing activities across chains is critical because it helps us understand how people use each Layer 2 (L2) chain. Furthermore, it provides crucial insights into the scalability and efficiency of any L2 solution.
The card of AMBCrypto of Artemis provided more insight into the world of L2s. Notably, Arbitrum ruled the DeFi sector as its Total Value Locked (TVL) was much higher than its contemporaries.
Optimism came second in terms of TVL. Base came third and zkSync came last, despite the high activity on the network. These figures have remained consistent in recent months.
Source: Artemis
If the Total Value Locked (TVL) on a Layer 2 (L2) chain is high, it means that many assets are being used and stored on that chain. This is a positive sign, indicating trust and adoption.
If there is a gap between user activity and TVL on an L2, it could indicate that people, even though they are using the chain, are not blocking significant assets. This may be due to the type of transactions or activities that take place in the chain.
Source: Artemis
It is also important to note that Base is relatively younger than other networks and may still need time to find a strong user base and accumulate even more TVL.
As can be seen from the image, Base already surpassed zkSync in terms of TVL at the time of writing. With Coinbase’s support, Base can do even more positively in the future.
How are the tokens?
Of the Layer 2 solutions discussed, Optimism and Arbitrum have individual tokens representing their networks.
Despite Arbitrum’s dominance in several areas, it was OP that had a larger market capitalization of 1.58 billion compared to ARB’s 1.36 billion. Additionally, OP also fared much better than ARB in terms of network growth.
Therefore, it remains to be seen whether the discrepancy between protocol performance and token growth proves to be a valuable opportunity for traders.
Source: Santiment
