Ethereum

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The total value locked (TVL) on Ethereum layer-2 networks recently hit a new all-time high in January, a testament to the continued adoption of Ethereum. Layer 2 networks sit on top of the Ethereum blockchain and help scale it by processing transactions off-chain before sending data back to the main blockchain.&nbsp; 
According to data from <a href="https://l2beat.com/scaling/tvl" rel="nofollow">L2BEAT</a>, a layer-2 analytics platform, the TVL on these scaling solutions recently reached an all-time high of $21.16 billion, representing a 340% growth from the same day last year.&nbsp; 
<h2 id="ethereum-layer-2-networks-hit-new-milestone">Ethereum Layer-2 Networks Hit New Milestone</h2> 
2023 was a great year for Ethereum, as the altcoin and its scaling solutions registered a steady increase in TVL despite <a href="https://www.newsbtc.com/news/solana/solana-flipped-ethereum-metric/">strong competition</a> from other networks like Solana and Cardano. Data from L2Beat shows the TVL on these scaling solutions started in 2023 with $4.81 billion but grew steadily throughout to end the year at $19.98 billion dollars, a 315% growth.&nbsp; 
This growth was particularly exacerbated in the last quarter of 2023 and continued into 2024. The TVL grew by $1.18 billion in the first three days of January to reach $21.16 on January 3, its current all-time high. 
At the time of writing, the TVL is now at $20.41 billion, still up by 3.82% in the past seven days. A large fraction of this layer-2 TVL can be attributed to <a href="https://l2beat.com/scaling/projects/arbitrum/tvl-breakdown" rel="nofollow">Arbitrum One</a>, with the scaling solution currently having $10.05 billion worth of cryptocurrencies locked.&nbsp; 
<a href="https://l2beat.com/scaling/projects/optimism/tvl-breakdown" rel="nofollow">OP Mainnet</a>, formerly called Optimism, is second with a current TVL of $5.84 billion. 57% of this TVL is composed of OP tokens, compared to Arbitrum One, whose ARB token constitutes only 36% of the TVL.&nbsp; 
<img loading="lazy" decoding="async" class="aligncenter size-medium" src="https://www.tradingview.com/x/VEiLxJuU/" alt="Ethereum price chart from Tradingview.com (Layer 2 Networks)" width="3266" height="1530"> 
<h2 id="state-of-the-eth-network">State Of The ETH Network</h2> 
This massive growth shows that Ethereum users are flocking to layer 2 networks to escape high gas fees and congestion on the mainnet. Ethereum’s TVL also witnessed steady growth throughout the year, adding $7.6 billion in the last quarter of 2023. Data from <a href="https://defillama.com/chains" rel="nofollow">DeFiLlama </a>shows the TVL on Ethereum is now at $28.532 billion. 
However, Ethereum has seen its daily active addresses and transaction count plunge in the last few months. Data from <a href="https://app.artemis.xyz/chains" rel="nofollow">Artemis </a>revealed the network is currently being surpassed by Solana and Sui in terms of daily transaction count. <a href="https://www.newsbtc.com/news/solana-threatens-to-unseat-ethereum-in-trade-volume-with-1-billion-in-single-day/">Recent competition from Solana</a> prompted an analyst to <a href="https://bitcoinist.com/ethereum-not-increasing-gas-limit-digging-own-grave/" rel="nofollow">describe Ethereum</a> as digging its own grave by relying too much on its layer-2 networks for scalability. 
Some layer-2 chains are also currently processing more transactions than Ethereum itself. L2BEAT puts the monthly transactions on zkSync Era and <a href="https://www.newsbtc.com/altcoin/arbitrum-rending-social-media-arb/">Arbitrum </a>at 39.91 million and 35.54 million respectively, ahead of Ethereum’s count of 33.91 million transactions.

Ethereum Layer 2 Networks Just Set A New Record

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