Onchain activity has been rapidly increasing in 2024, with blockchain networks like Ethereum posting significant growth in terms of the size of its user base and other factors.
According to the study, the rise of onchain activity on Ethereum and L2s in the first half of 2024 was spurred by large pickups in activity on leading L2s.
What are L2s?
Built on top of Ethereum, L2, or layer 2, blockchains aim to speed up transaction processing while keeping the network commissions and fees down for layer-1, or the Ethereum network.
These L2 solutions enable low-cost transactions to be processed after validation on parallel blockchains, with records being transferred to the main blockchain to ensure immutable recording.
According to data from the Ethereum analytics platform Growthepie, Linea, Base and Arbitrum are the top three L2s at the time of writing, with a combined amount of 1.8 million daily active addresses.
In May 2024, Ethereum co-founder Vitalik Buterin claimed that Ethereum L2s have become “the ultimate playing field for action” from institutional profit-oriented groups and people purchasing assets like non-fungible tokens (NFT).
User growth on L2s outstripped growth on Ethereum
Amid rapid development of new, faster and cheaper L2s, user growth on layer-2 blockchains has significantly outperformed growth on Ethereum, according to Coinbase and Glassnode.
According to the report, the number of Ethereum and L2 transactions increased by 59% in Q2 2024, with most of the growth occurring on L2s.
“The move onchain is driven by a variety of use cases, from lending to staking to trading, and we expect to see adoption grow as existing use cases mature and innovative new ones take hold,” the study authors wrote.
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Additionally, total transaction fees on Ethereum dropped by 58% in Q2 2024 despite the number of transactions increasing by 59%. The drop in the network fees came after Ethereum’s Dencun upgrade in March 2024, which significantly reduced transaction fees.
While Ethereum has recorded a notable onchain activity spike, crypto users were less active with Bitcoin (BTC) in Q2 2024, according to the report.
As such, the average number of daily active Bitcoin addresses fell 20% in Q2 2024, while the average number of daily active entities fell 16%, the study mentioned.
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