Translation: Blockchain in Vernacular
Bear markets are the ultimate stress test for protocols, and they reveal where the real users are. Here’s my deep dive into the current state of Ethereum L2, with some visualizations of on-chain data analysis.
Since 2023, new L2 solutions for Ethereum have emerged rapidly, and @l2beat currently tracks data for 74 L2s and 30 L3s. However, only a few general-purpose Rollups have gained mainstream attention, attracting a large amount of TVL and users. This study will focus on analyzing the nine largest ones.
1. Market value: circulating market value and fully diluted market value
Most L2s currently have fully diluted valuations (FDV) in the billions of dollars, but a circulating market capitalization of less than $1 billion, indicating that a large portion of their tokens are still not in circulation.
The only exception is @0xMantle, which has unlocked 52% of its token supply, becoming the only L2 with a circulating market cap of over $1 billion.
High FDV and low circulation are one of the key reasons why many recent airdrops have failed to meet user expectations. It is challenging to estimate the current valuation, and there is uncertainty about possible future downside trends.
2. Total locked value (TVL)
In terms of TVL, all chains had a rough summer, except for chains with incentive programs like @Scroll_ZKP, @LineaBuild, and @0xMantle.
However, Linea’s airdrop program has been ongoing for nearly a year, and community interest in it has declined compared to more recently announced programs, such as Scroll’s.
In the red market, @zksync and @blast were the most affected as these two chains just issued tokens this year, causing liquidity to shift to more attractive destinations.
3. Fees and Trading Activities
After the Dencun upgrade, Data Availability (DA) no longer provides a significant boost to the Ethereum economy, impacting Ethereum and L2 fees. Therefore, it becomes particularly important to study the relationship between fee dynamics and trading activity.
Here, @base has shown strong growth momentum and continued volume growth driven by speculation and as the preferred platform for new memecoin issuance on Ethereum L2.
In contrast, @zksync and surprisingly Linea underperformed, despite @LineaBuild still having an incentive plan.
4. Monthly Active Users (MAU)
MAU dynamics, a key metric for evaluating chain user retention, shows a similar trend. @0xMantle and @base perform best, while @StarknetFndn, @zksync, and @blast lag behind.
Comparing MAU data with FDV, it is obvious that Starknet is significantly overvalued compared to Arbitrum, Optimism and even ZKsync.
5. Bridging capital inflow and outflow
Bridge net flow is a key metric for evaluating new users and capital inflows. In L2, chains with positive net flow (more capital inflows than outflows) include @Arbitrum, @StarknetFndn, @Optimism, @base, and @0xMantle, the latter of which has the largest gap between outflows and inflows.
In contrast, @LineaBuild, @zksync, and @blast showed negative net flows.
The most surprising case here is @blast, which now has over 300 core developers (most L2s usually have only 30-50 people). This large team is also making a lot of code commits. What exactly are they working on? No news for the time being.
