Ethereum milestone: $5.2 billion deposited in second layers

The total locked value (TVL) in the layers 2 of Ethereum, in which scalability tools such as rollups work , reached $ 5.25 billion. This shows an increase that has been almost constant, reaching a figure of 28% in the last 30 days.

According to what the L2beat site reports, that is the total value locked in the second layers of Ethereum at the close of this note. In the last 7 days, this figure has increased by 7.78%, according to the same source. This constitutes an all-time high in said index for the Ethereum network, confirming very strong year-on-year growth: a year ago, rollups had just over USD 8 million, that is, 0.15% of the current total.

A similar data – also historical until that moment – had been provided last Monday, November 8, by none other than Evan Van Ness, in a publication on his Twitter account. Van Ness is director of decentralization at the Ethereum Foundation, and had said on that occasion that the second layers exceeded USD 5 billion for the first time in its history.

Beyond the milestone reached, these locked funds do not represent a significant number of Ethereum’s market capitalization. According to CoinMarketCap, this is USD 559 million at the close of this note, so the TVL in its second layers is equivalent to just under 1%.

However, as can be seen in the graph below, the increase has been pronounced and almost uninterrupted in the last semester, a trend that seems to take hold as new developments continue to appear on the Ethereum network and existing ones grow; a panorama that makes these second layer solutions more necessary.

Most Used Ethereum Second Layer Solutions

Arbitrum is one of the most used rollups. According to the L2beat site, the total value locked in this second layer solution is $ 2.8 billion, which represents 53.68% of this market.

The second place in the ranking is occupied by dYdX, a decentralized exchange in which USD 968 million have been placed, that is, 18.44% of the total deposited in second layers of Ethereum.

Finally, the podium is completed with Loopring, a rollup in which USD 489 million were deposited, although a large percentage (76%) is made up of money invested in the Loopring token (LRC). Therefore, if we talk about funds purely invested in rollups, Optimism appears in third place, another that already has a TVL of USD 488 million.

What are the layers 2 of Ethereum?

As CriptoREPORTAGE explained in previous posts, the second layers of Ethereum are solutions that allow more efficient organization of transactions that are then confirmed on the main network.

This, also known as the mainnet, is usually very congested; precisely because of the high demand and, therefore, it is usually more expensive to operate. This is because said blockchain is the one used to develop decentralized finance applications (DeFi), smart contracts and non-fungible tokens (NFT), among other things.

All of these products have had exponential growth since 2020, which has resulted in a massive exploitation of the Ethereum network. To solve this problem, instruments such as rollups allow grouping (or “rolling”, if the term is translated into Spanish) thousands of minor transactions and then confirming them all together on the main network.

With this, it is possible to reduce their cost and the time necessary to execute them. This constitutes a scalability solution that, in addition to improving Ethereum applications in the future, as experts point out, does not have a negative impact on network security, which is also crucial.