The total value locked (TVL) on Layer 2 Ethereum (ETH/USD) networks has reached a new peak as gas fees continue their steady ascent, driving further adoption, CoinTelegraph wrote. L2beat, a layer-two analytics platform, reported that the TVL across various layer-two networks and protocols peaked at $5.64 billion.
Arbitrum holds lion’s share of L2 market
Adoption of layer-two scaling solutions has surged since November, which saw the highest average gas fees in Ethereum network history. They provide much lower transaction fees and higher transaction throughput. With a TVL of $2.67 billion, Arbitrum has the lion’s share of the layer two market, almost half of the total.
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The DEX dYdX ranks second with TVL of $975 million. The L2 Loopring DEX comes third with $580 million. Most of its TVL is accounted for by its own token (LRC/USD).
Layer-two TVL more than doubled since last month
Layer two total value locked has more than doubled since the beginning of October, up 110% from $2.68 billion. On average, Ethereum transaction fees are around $40 at the moment. They have increased by 700% over the past four months, reaching their second-highest level ever at around $65 on November 9.
Gas prices vary depending on operation
According to Etherscan, a complicated smart contract interaction or Uniswap (UNI/USD) swap can cost as much as $140. On the other hand, a simple ERC-20 token transfer currently costs around $45.
Registering a name on the Ethereum Name Service can cost hundreds of dollars in gas despite the actual domain name costing just a few bucks per year.
Stakeholders increasingly avoid Ethereum network
Since last month, decentralized finance platforms compatible with multiple blockchains have experienced record inflows as developers and investors try their best to avoid the Ethereum network due to soaring gas fees. In a sense, they have been trying since 2014, when Ethereum co-creator Vitalik Buterin famously said:
The ‘Internet of Money’ should not cost $0.05 per transaction. It’s kind of absurd.
Ronin takes the lead
In November, the Ronin bridge became the most popular protocol, largely due to asset migration on the part of Axie Infinity (AXS/USD) users. Ronin’s fees are far more affordable.
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