Ethereum has reached a new peak when it comes to its layer 2 total value locked due to gas fees increasing due to the drive of further adoption.
Layer 2 analytics platform known as L2beat says that the total TVL amount or total value locked across different L2 protocols and networks has reached a new all-time high at $5.64 billion. Ethereum layer 2 total value locked has reached new peaks.
Ethereum Layer 2 TVL
L2 scaling solutions are able to provide higher transaction throughout as well as lower transaction fees. According to the story by CoinTelegraph, they have even surged when it comes to adoption in November which was when the highest average gas fees on the Ethereum network was ever seen.
Arbitum is known to have a massive share in the L2 market with a whopping $2.67 billion locked up. This is equal to around 45% of the total value locked amount.
Growth on Blockchain Dapps
The new dYdX decentralized derivatives exchange comes in second place with a massive $975 million in TVL. Loopring L2 DEX also follows in third place with a total of $580 million. It’s own LRC token, however, makes up the majority of its total value locked.
Layer 2 TVL has done more than just doubled since the start of October. This is by surging 110% from $2.68 billion to its now much higher levels.
Ethereum Gwei Sees Significant Price Increase
According to Bitinfocharts, the average Ethereum transaction fees usually end up at around $40. They spiked on Nov 9 to their second highest level ever demanding about $65 increasing by over 700% in just four months.
Gas prices, as of the moment, still vary depending on what operation is being used for. A simple ERC-20 token transfer can even cost all the way up to around $45 and more complex smart chain interactions or even using Uniswap can cost users a painful $140 as per Etherscan.
Registering a simple name on the Ethereum Name Service can already cost users hundreds of dollars in gas despite the domain simply costing just a few hundred dollars a year. Ever since October, multichain compatible DeFi platforms have also seen new record inflows as both investors and developers are looking for ways to avoid the Ethereum network due to its massive gas fees.
With more and more projects coming out, being able to build a Dapp can still be very expensive for small-time developers. Due to the massive gas fees, developers are now stuck with either paying the ERC-20 gas fees or looking for a substitute for Ethereum.
Other platforms are trying to do what Ethereum is currently doing but so far, it’s hard to pinpoint which network could be sustainable for the long term. Things could change in the future should there be a network that can do what Ethereum does but cheaper, faster, and sustainable in the long run.