Ethereum has marked a new milestone with its Layer 2 (L2) networks by reaching a total value locked (TVL) of $51.5 billion, a 205% increase from the $16.6 billion recorded in November 2023, according to data from L2beat . This growth reflects growing interest in L2 solutions that scale Ethereum by reducing costs, congestion, and wait times on the mainnet.
Arbitrum and Base lead growth
Arbitrum One and Base lead this advance, with $18.3 billion and $11.4 billion in TVL, respectively, representing more than half of the total TVL of L2 networks.
During the last week of November, Arbitrum’s TVL increased by 12%, while Base grew by 11.4%, setting a record of 106 transactions per second (TPS) on November 26 thanks to the rise of meme coins. Additionally, Base surpassed the 1 billion total transactions mark.
The impact of the Dencun update
Ethereum’s Dencun upgrade, implemented in March 2024, was key to this growth. By introducing EIP-4844, rates on L2 networks were stabilized and network capacity was increased. Platforms such as Starknet, Optimism, Base and Zora OP Mainnet reported a 99% reduction in median transaction fees following the update.
According to Nick Dodson, co-founder of Fuel Labs, the primary goal was scalability, not just fee reduction, which has driven the appeal of L2 solutions.
Challenges and competitiveness
Despite success, L2 networks face challenges such as liquidity fragmentation in DeFi protocols and the risk of diverting revenue from the Ethereum mainnet, affecting the price of ETH.
Optimism and ZKsync Era also contributed to the growth, with $7.99 billion and $1.12 billion in TVL, respectively. Smaller networks like Linea and Starknet experienced double-digit percentage growth, highlighting widespread adoption.
Starknet plans to quadruple its TPS and further reduce fees in the coming months, increasing competition with high-speed blockchains like Solana.
Ethereum shows resilience
Ethereum price has shown strength, recovering to $3,579 after falling to $3,000 last week. Futures data on CME indicates sustained investor confidence, with open interest reaching all-time highs.
TVL’s record reflects not only the adaptability of Ethereum, but also the accelerated growth of its Layer 2 ecosystem, positioning it as an undisputed leader in Blockchain innovation and scalability.
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