New data suggest that the ecosystem is seeing record network activity. In the last two months, both layers – 1 and 2 – have collectively processed 152 million transactions. However, it is the layer two solutions such as Arbitrum, Optimism, and others that accounted for 58%.
On the other hand, Ethereum mainnet transactions were observed to be hovering at their lowest point in over two years, which isn’t the case for layer two rollups. The latter is responsible for processing as many transactions as the mainnet.
Arbitrum: Undisputed Layer 2 Leader
Arbitrum, Optimism, zkSync, and StarkNet are four popular Layer 2s. The increased adoption of the first two rollups, however, can also be attributed to the fact that t has become easier for projects to port over. Even well-known centralized crypto exchanges have integrated these two prominent layer-two solutions.
As developer tooling has matured, it’s become easier for projects to port over to rollups like @arbitrum and @optimismFND and for CEXs to integrate as fiat on and off-ramps.
As the hype of alternative L1s wore off, commitment to scaling the Ethereum ecosystem paid dividends. pic.twitter.com/xMTo0DfaOm
— Messari (@MessariCrypto) December 17, 2022
Looking at the total value bridged by these protocols, Arbitrum has established a clear dominance with $1.06 billion. Despite the bear market, its growth has been steady and can be partly credited to the Nitro upgrade, which introduced lower fees, increased capacity, and smoother development.
Furthermore, its developer – Offchain Labs – raised around $147 million in funding from the likes of Lightspeed Ventures, Coinbase Ventures, Pantera Capital, as well as billionaire Mark Cuban, among others. According to Pitchbook, the firm’s post-money valuation is over $1.2 billion.
In a bid to expand the footprint of Arbitrum, Offchain Labs announced the acquisition of Prysmatic Labs, which happens to be one of the core engineering teams behind Ethereum’s transition to proof-of-stake.
Optimism Trailing Closely
The latest stats from DeFiLlama also showed that Optimism has grown significantly in terms of TVL share, which currently stood at $526.15 million. Outside of DeFi, the layer 2 solution has witnessed positive growth in the NFT space. The number of buyers of Optimism NFTs has been on a consistent upward trajectory over the last few months. Several initiatives, such as introducing Optimism quests, among others, have managed to attract more users.
The scaling solution secured $150 million in Series B funding, co-led by Andreessen Horowitz and Paradigm, in March this year.
Layer 2 solutions’ main appeal is declining transaction fees. In that regard, Arbitrum and Optimism have performed fairly well. Dune Analytics data suggested that the fees on both the layer 2 solutions have plunged substantially.
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