As an important part of the crypto market, the locked amount of stablecoins on the Ethereum Layer 2 (L2) network has reached a record high of US$13.5 billion, further highlighting the demand and use cases of stablecoins in the real world.
Stablecoin market cap hits record growth: L2’s key role
As of December 2024, the total supply of stablecoins on the Ethereum blockchain has exceeded $205 billion. Among them, the amount of stablecoins locked in the Ethereum L2 network has shown significant growth, indicating the growing demand from users and institutions for faster and cheaper on-chain transactions.
According to data platforms Tie Terminal and Cointelegraph Markets Pro, the continued growth in the total stablecoin market capitalization is mainly due to the following aspects:
Lower transaction costs: L2 solutions such as Arbitrum One and Base provide users with a low-cost transaction environment, significantly reducing the high gas fees of the main network.
The boom of decentralized finance (DeFi): The increasing number of stablecoins locked in DeFi protocols indicates that users’ trust in crypto financial instruments is gradually increasing.
Cross-border payments and value storage: The use of stablecoins has extended beyond the crypto industry and has become a tool for residents of many countries to hedge against the volatility of their local currencies.
Currently, the top stablecoin lock-up platforms in the L2 network are:
Arbitrum One: $6.75 billion locked.
Base: Locked volume is $3.56 billion.
Stablecoins: The “Killer App” of Cryptocurrency
This trend is particularly notable with stablecoins being heralded as the “killer use case” in this crypto cycle. As Matthias Seidl, co-founder of blockspace analytics firm growthepie.xyz, said: “Layer 2 stablecoin supply continues to reach new highs, reflecting the continued expansion of real-world use cases.”
This can also be seen from the following data:
DefiLlama data: The market value of stablecoins has steadily increased from US$123 billion at the end of 2023 to US$202 billion at the end of 2024, setting a record high.
Tether (USDT): As the leader in the stablecoin field, USDT's market value maintained monthly growth in 2024 and exceeded US$140 billion in December.
Future Outlook: The Potential of Ethereum L2 and Stablecoins
The continued growth of the stablecoin market value shows that it has become an important bridge connecting the traditional financial and cryptocurrency ecosystems. The expansion of the Ethereum L2 network has further consolidated the foundation of this bridge.
Looking ahead, stablecoin applications on L2 have the following potential:
Driving the global payment revolution: Stablecoins provide fast and cheap cross-border payment options through L2 networks, which may replace some traditional payment channels.
Support DeFi innovation: The scalability of L2 will enable more users and institutions to enter the DeFi ecosystem, promoting the emergence of innovative protocols and new financial instruments.
Strengthening the competitiveness of the Ethereum ecosystem: The growth in the amount of stablecoins locked will consolidate Ethereum's position as the "heart" of the crypto economy, while attracting more developers and capital to join its ecosystem.
How do you think the development of stablecoins will change the traditional financial system? Will the locked amount of L2 surpass L1 in the future? Feel free to share your views!
