Ethereum’s Layer 2 Networks Accounted for 61% of Transactions in Q3 2023, According to Messari Report
Ethereum’s layer 2 networks have become increasingly popular as developers seek faster and more cost-effective ways to interact with the blockchain. A recent report from blockchain intelligence firm Messari reveals that layer 2 solutions accounted for 61% of all Ethereum transactions in Q3 2023.
The State of Ethereum report examines various aspects of the blockchain and cryptocurrency industry over the past three months, including prices, adoption of layer 2 networks, asset dominance, and network upgrades.
What are Layer 2 Solutions?
Layer 2 solutions are separate networks that allow developers to build on Ethereum’s mainnet. These solutions were developed to address the congestion and scalability issues on Ethereum, reducing fees and expanding use cases.
Base and Friend.tech Drive Adoption
Messari researcher Kunal Goel attributes the increased adoption of layer 2 transactions in Q3 to the growing popularity of Base. Since its launch in August, Base has gained traction, surpassing the mainnet in terms of activity at one point. The network currently has $442 million in total value locked (TVL), making it one of the top four layer 2 solutions.
Friend.tech, a social token-driven platform, also played a significant role in driving transactions to layer 2. The platform generated millions of dollars within a short period and further boosted Base’s position as a leading solution.
Arbitrum and Optimism Show Positive Results
In Q3, Arbitrum emerged as the largest layer 2 solution with an average of 600,000 daily transactions. However, both Base and Optimism have captured a significant market share from Arbitrum by focusing on community engagement and attracting more projects to their platforms.
Arbitrum currently has a total value locked (TVL) of $4.2 billion, while Optimism records $1.27 billion. Despite the success of layer 2 solutions, Goel advises caution due to the bearish outlook in the market.
Hot Take: Ethereum’s Layer 2 Networks Gain Traction, Driving Adoption and Scalability
Ethereum’s layer 2 networks have experienced significant growth in Q3 2023, accounting for 61% of all transactions on the blockchain. The adoption of layer 2 solutions, such as Base and Optimism, has helped address Ethereum’s congestion and scalability issues by offering faster and cheaper alternatives. These networks have attracted millions of dollars in transactions and gained popularity among developers.
However, caution is advised as the market still faces a bearish outlook. Despite this, Ethereum has outperformed Bitcoin in terms of price growth during Q3. With ongoing developments in layer 2 solutions, Ethereum is well-positioned to continue driving adoption and scalability in the future.
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