Ethereum Layer 2 Ecosystem: A Future Without L2s is Hard to Imagine

Ethereum (ETH) Layer 2 ecosystem has become a hive of activity with new scaling solutions being added every day. Considering their importance and proven track record in alleviating the burden on the base layer, it can be difficult to envision a future without L2s.

Results of Ethereum Developments!

Over the years, Ethereum has seen an extraordinary increase in its user base and network traffic, driven by the emergence of decentralized finance (DeFi) and non-fungible token (NFT) technologies. This significant growth has imposed capacity limitations on Ethereum, resulting in very high transaction fees.

Then came the L2 solutions. Built on top of the Ethereum base layer, these chains process numerous low-value transactions and provide the proof to the main blockchain. This way, Ethereum addresses security and decentralization while L2s provide scalability, thus solving the biggest trilemma of blockchain technology.

According to a report by on-chain research firm IntoTheBlock, transactions conducted between Ethereum and major optimism rollups like Optimism (OP) and Arbitrum (ARB), as well as the recently launched Base, reached the second-highest level ever recorded last week.

Current Data on Altcoins!

The all-time high (ATH) was achieved earlier this year in March. This happened when users were given 1.7 billion dollars worth of ARB tokens as part of an airdrop. The current frenzy can be identified with the fact that the total number of transactions is nearly three times the peak of the 2021 bull market. At that time, most of the network traffic was happening on the mainnet.

However, the rise of L2s did not result in a decline in Ethereum’s dominance. The report highlighted that the base layer continued to process around 1 million transactions daily, unchanged from the previous year. Base, the latest addition to the exciting world of scaling solutions, has stood out in the ecosystem since its initial launch. Built on the same infrastructure as Optimism, Base is part of the ambitious Superchain ecosystem.

Base surpassed both Arbitrum and Optimism in terms of daily transactions shortly after its mainnet launch. Despite its rapid decline, the Coinbase-backed L2 processed an average of 450,000 transactions last week.