Ethereum L2s take the center stage as countdown to Dencun begins

• ETH L2s handled nearly 10x more transactions than the base layer in the last seven days.
• TVL on ETH L2s jumped 65% YTD.

Ethereum [ETH] layer-2 (L2) solutions carried on the strong momentum generated in the last year to 2024 as well.

Ethereum scales and how

According to a recent post by on-chain analytics firm IntoTheBlock, transaction volumes across leading optimistic rollups including Arbitrum [ARB], Optimism [OP] and Base have nearly doubled since the start of this year.

On expected lines, Arbitrum accounted for more than 50% of the total volume.

Source: IntoTheBlock

To get more insights, AMBCrypto examined the broader ETH L2 market, which included zero-knowledge rollups (zk-rollups) as well.

Data sourced from L2Beat showed scaling solutions processing nearly ten times as many transactions on the mainnet over the last seven days.

The average transactions per second (TPS) on the L2s consistently remained above 100 since the 25th of February, while the mainnet’s count hovered in the usual range between 12-14.

Source: L2Beat

L2 solutions witness jump in TVL

The so-called L2 solutions, built atop the base layer of Ethereum, were projected to be the answer to the scalability question.

While these chains handle the bulk of the low-value transactions, the mainnet would take care of security and decentralization, thus addressing the blockchain trilemma to a great extent.

The fundamental advantages like high throughput and low fees attracted a plethora of decentralized applications (dApps) towards L2s.

As of this writing, more than $33 billion was locked into L2 projects, implying a 12.9% increase over the week, and a 65% leap year-to-date (YTD).

Source: L2Beat

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A watershed event awaits

Such numbers come at a time when the L2 proponents and the broader Ethereum ecosystem were eagerly awaiting for the Dencun Upgrade. The biggest upgrade since last year’s Shapella, Dencun was expected to bring about a whopping 10x reduction in L2 transaction fees.

If these estimates come true, the ETH L2 ecosystem might hold the vast majority of all DeFi users and apps in the near future.