Ethereum: Layers 2 TVL soars to $21 billion

The Ethereum crypto platform continues to perform. This time, it is the total blocked value (TVL) of the layer 2 blockchains linked to it, which has attracted the attention of the crypto community. It is currently valued at just over $21 billion. An absolute record.

The TVL of Ethereum layers 2 increased by 333% in one year!

While the spotlight is on the potential approval of a spot Bitcoin ETF, one important development has been quietly unfolding. It concerns Ethereum layer 2 blockchains.

These have known a remarkable increase in their total value locked (TVL). The latter reached $21.16 billion as of January 3, 2024. This represents a substantial increase of 333% since the beginning of January 2023. An unprecedented surge.

Arbitrum One dominates this positive trend within layer 2 blockchains. Its leadership results in a hegemony representing nearly 50% of the market share with an impressive TVL of $10 billion.

Optimism follows with a market share of 28.7% for an estimated TVL of $5.8 billion. Other layer 2 crypto platforms such as Metis Andromeda and Base, occupy comparatively more modest positions, with around $750 million in TVL each.

Ethereum Layers 2 sees record TVL of $21 billion

Layers 2 of Ethereum, particularly dynamic?

It must be emphasized that this exceptional performance of Ethereum Layers 2 occurs in a very specific context. Indeed, the current TVL of these layer 2 blockchains appears to match the TVL of decentralized finance (DeFi) protocols as of January 2021.

Over the past year, the TVL of Layer 2 networks has seen an impressive increase of 333%. A result which far exceeds the 38% growth observed in the DeFi market during the same period.

While Ethereum competitors like Solana and Avalanche have seen recent surges, momentum appears to be shifting back towards Ethereum. This trend is interesting because it suggests that market participants are re-evaluating their blockchain choices.

This, by moving their resources and interests from alternative layer 1 blockchains to Ethereum and its layer 2 solutions. However, the price of ether (ETH), the native crypto of Ethereum (ETH), is stagnating at 2,245 $. A 54% decline from its November 2021 peak at $4,878. Analysts anticipate a potential market shift when ETH prices start to rise. Which would lead to increased activity on both Ethereum and Layer 2 networks.

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