The Ethereum ecosystem is seeing increasing value growth, showing growing investor interest in Ethereum-native assets.
Ethereum layer-2 (L2) networks have reached a new all-time high of over $51.5 billion in cumulative total value locked (TVL).
This marks an over 205% increase in cumulative TVL, from just $16.6 billion in November 2023, L2beat data shows.
Total value locked, Ethereum L2s, 1-year chart. Source: L2beat
L2 scaling solutions are essential for creating more scalability around Ethereum, the leading smart contract network. By offloading and processing transactions on secondary chains, the L2s decrease the overall cost and waiting time associated with the Ethereum mainnet.
Despite their significant benefits, some industry experts are concerned that L2s are “cannibalistic” for the revenue of the Ethereum mainnet and could eat into price potential for Ether (ETH).
Arbitrum One and Base lead 205% L2 value surge
Arbitrum One and Base are the main drivers of the rise to over $51 billion TVL.
As the leading L2, Arbitrum currently holds over $18.3 billion worth of TVL, representing 35% of the total L2 ecosystem’s TVL.
Top L2s by TVL. Source: L2beat
The second-largest L2 network, Base, currently holds $11.4 billion in TVL or just over 22% of the cumulative L2 TVL.
Arbitrum’s TVL rose over 12%, while Base’s TVL also rose over 11.4% during the week leading up to Nov. 28.
Base surpassed the record 106 transactions per second (TPS) on Nov. 26 as its TVL surpassed the $10 billion milestone for the first time. The total number of Base transactions recently crossed the one billion milestone, largely due to the memecoin mania during this bull cycle.
Dencun upgrade was a significant milestone for L2 fee stabilization
L2s have seen a significant boost from Ethereum’s Dencun upgrade, which shipped in March, as the biggest network upgrade since the Merge.
The upgrade was a significant boost for fee stabilization around L2s, Nick Dodson, the co-founder and CEO of Fuel Labs, told Cointelegraph:
“On the point of EIP-4844, a lot of people talk about the fee reduction, but it’s more about fee stabilization. It’s actually more about expanding capacity and scale and not so much lowering fees.”
Nick Dodson, Fuel Labs, Interview with Cointelegraph’s Zoltan Vardai
Some Ethereum L2s saw a 99% median transaction fee reduction after the upgrade went live, including Starknet, Optimism, Base and Zora OP mainnet.
Magazine: Make Ethereum feel like Ethereum again: Based rollups explained
