Ethereum L2 TVL crosses $3 billion, Here’s What Fueling the Rise

The latest update in the ETH L2 network saw the total lock-up volume of the Layer2 cross $3 billion, according to the L2BEAT data recorded on September 13. Furthermore, the largest number of lock-up lays with the Arbitrum protocol, which has locked approximately $2.2 billion, accounting for 73.75% of the TVL.

Arbitrum L2 TVL

Just last month, the top Ethereum scaling solutions provider, OffChain Labs announced the launch of Arbitrum One mainnet for the public. However, this newly launched L2 protocol has become a favorite in a short timeframe. According to CoinGape’s recent coverage, the Arbitrum network added over 17,000 unique addresses in a single day. As of yesterday, the total unique addresses on Arbitrum were nearing 42,000.

Polygon L2 TVL

While Arbitrum is gaining traction, Polygon Protocol remains one of the top L2 protocols. According to DefiLlama, Polygon’s current TVL on L2 stands at $8.32 Billion. However, Polygon has experienced a slight short from $10.36 Billion TVL last month.

Mainnet to L2 transition

Traders are rapidly shifting to L2 as the ETH mainnet gas fee spikes. Last week, Ethereum’s transaction fee experienced a 4-month high, at 7,300 gwei median gas price. NFT transactions were speculated to be the cause of this sudden and massive surge in the gas fee of the ETH mainnet.

ETH Founder, Vitalik Buterin commented on the rise in non-fungible tokens (NFTs) on the Ethereum blockchain. He suggested that moving all NFTs to layer-two solutions can beat the high gas fees issue. According to Buterin, the mainstream blockchain is currently too crowded that is resulting in problems like, high transaction fees. He advised blockchains and NFTs to transfer to L2 to counter scalability issues. Furthermore, ETH founder highlighted that the NFT ecosystem is rapidly expanding and will soon grow “too big for one single rollup to handle safely”.

“All existing major EVM-capable rollup platforms have backdoors, centralized sequencing, or other training wheels, and it’s risky to commit an entire ecosystem to a single rollup while there is uncertainty about how the rollup will graduate beyond such features.”, wrote Buterin.