As more Layer 2 solutions emerge, ethereum is losing its dominance as the primary network for on-chain activities.
Activity on Layer 2 networks is booming as transactions for these products accounted for more than 60% of all ethereum activity in Q3 2023. According to data According to Messari, Coinbase’s Base Network at one point was conducting “more transactions than the ethereum Mainnet.”
<img decoding="async" width="1024" height="576" src="https://crypto.news/app/uploads/2023/10/F8ALUiaaIAA0wfY-1024×576.jpg” alt=”Layer 2 transactions accounted for more than 60% of all ethereum activity in Q3 and Q1″/>
According to Messari’s calculations, other Layer 2 networks also saw strong growth during the last quarter, with Optimism seeing a 40% increase in transactions. However, this increase in activity also had side effects for others:
“It seems that Base and Optimism cannibalized some of the activity on Arbitrum, where transactions fell by 36%”
messer
However, Arbitrum still leads among other Layer 2 networks with 600,000 average daily transactions, compared to 400,000 for Optimism and Base, the firm said.
<img decoding="async" width="1024" height="209" src="https://crypto.news/app/uploads/2023/10/jpsdijfsd-1024×209.png” alt=”Layer 2 transactions accounted for more than 60% of all ethereum activity in Q3 and Q2″/>
According to L2BEAT dataArbitrum is also the largest Layer 2 network in terms of total value, having over $5.7 billion in cryptocurrencies locked, representing a 54.4% market share among other rollups. Despite the increase in activity, the total value locked in decentralized finance (defi) protocols has been steadily declining since March 2023. According to DefiLlamaDefi protocols currently have around $37.6 billion in liquidity, a level last seen in February 2021.
