Ethereum Layer 2s such as Optimism, Arbitrum, and Polygon increased in popularity in Q1 2023, according to a report by development platform Web3 Alchemy. Ethereum users connected more than $635,000 worth of crypto assets to these networks from January to March, an increase of 44% over Q4 2023 and 518% over Q1 2022.
The report, simply titled “Web3 Development Report”, cited Dune Analytics as a source for this data. It showed that users only connected approximately $103,000 in assets to layer 2 in Q1 2022, while the same three months in 2023 produced more than $635,000 in bridged volume.
Alchemy suggested that this increased activity may have been bolstered by successful airdrops from Optimism and Arbitrum in Q1 2023.
In addition to increased user connection of assets, Layer 2 also showed increased activity from developers. Although the deployment of Layer 2-related smart contracts decreased by 30% relative to Q4 2022, it increased by 160% compared to Q1 2022, according to the report.
The cryptocurrency industry is coming off a sharp drop in cryptocurrency trading volume and prices throughout 2022, with scandals like the UST decoupling and FTX collapse causing many investors to cringe. But despite this negative sentiment, users still flocked to these new scalability solutions.
Related: 3 Signs Arbitrum Price Is About To Hit A New High In Q2
The Ethereum ecosystem as a whole also showed increased interest from developers. Ethereum Software Development Kits (SDKs) such as Ethers.js, Web3.js, Hardhat, and Web3.py were downloaded 1.3 million times in Q1 2022. This became 1.9 million in Q1 2022. first quarter of 2023, an increase of 8%. Additionally, downloads of the MetaMask SDK, a tool used to develop applications that can interface with Ethereum’s MetaMask wallet, increased in each month of Q1.
Ethereum Layer 2s have been offered as a solution to Ethereum’s scalability problem, which has periodically caused high gas fees since 2020. Some experts have argued that sharding the Ethereum network will also help lower gas fees.
