Ethereum plays a huge role in decentralized finance (DeFi) apps. However, scalability has remained one of its biggest limitations. Scalability simply means to handle an increased amount of work. So, Ethereum depends on a bunch of layer 2 platforms to handle the bulk of its transactions.
Ethereum layer 2 platforms are in high demand. And they are set to play huge roles in the coming bull market, as we expect lots of activity within the Ethereum ecosystem. This article seeks to understand the most widely adopted Ethereum layer 2. Why?
First, the level of adoption often reflects the reliability of the Layer 2 solution. Platforms with high adoption levels are mostly well-tested and vetted by the community. This indicates their capacity to process huge transaction volumes. It also reflects their strength against threats.
Furthermore, high adoption rates suggest that the Layer 2 platform successfully addresses key issues such as scalability and transaction costs. This makes it a good choice for projects and apps across the DeFi and NFT platforms.
In addition, adoption rates also mirror broader ecosystem support and integration. This often suggests that such solutions have good partnerships with other projects, active community engagement, and good developer resources.
For investors and stakeholders, high adoption can mean long-term potential and growth in layer 2. This is an important factor when considering what to invest in or support.
The table below shows layer 2 solutions, evaluating them across different metrics.
| Chain | Type | Average Transaction Fee | Revenue (last 30 days) | Active Users (last 30 days) | TVL
Source: DeFiLLama |
Monthly Transactions (last 30 days) | Core Developers |
| Base | Optimistic Rollup | 0.013 | $3.699M | 8.6M | $1.347b | 92.89m | 27 |
| Optimism | Optimistic Rollup | $0.124 | $2.330M | 1.9M | $627.46m | 14.91 | 98 |
| Scroll | Zk Rollup | – | – | – | $506.89 | 9.56M | 26 |
| Arbitrum | Optimistic Rollup | $0.005 | $4.482M | 8.5M | $2.706b | 64.53 M | 40 |
| Linea | Zk Rollup | – | – | 2.17M | $680.95m | 17.06M | 67 |
Analysis of Adoption
From the metrics above, Base and Arbitrum lead in terms of active users, with 8.6 million and 8.5 million users, respectively. Arbitrum, however, had the edge over Base in revenue and TVL. This suggests that it has a higher level of user engagement. And investment per user. Base recorded the highest number of transactions in the past month. This reflects its efficiency in handling a large volume of activities.
Scroll and Optimism are also noteworthy in terms of their core developers. Optimism has a significant developer community, with 98 core developers. This suggests that the layer 2 solution has had strong development. And has significant potential for growth. However, Optimism’s transaction fees could be a barrier to broader adoption. Base and Arbitrum are cheaper. This could limit Optimism’s adoption.
Scroll, a Zk Rollup, provides a different approach to scaling and offers good privacy advantages. However, we found insufficient data on its users and revenues. This suggests that it is a newer player in the market.
Conclusion: Which is the most adopted and why?
Our data points to Arbitrum and Base as the most adopted Ethereum Layer 2 solutions. Arbitrum leads in revenue and TVL. This reflects its ability to attract significant investments. And generate good transaction fees despite its low cost per transaction. Our data suggests that Arbitrum is more appealing to users with substantial assets. There are lots of reasons why people love to use Arbitrum. First, it is compatible with Ethereum’s existing infrastructure. This makes it easy for developers to migrate their applications. Furthermore, Arbitrum has efficient scaling abilities.
On its side, Base recorded the highest user activity, boasting a slightly higher transaction fee than Arbitrum. However, it excels at processing a large volume of transactions. Base is also very popular for everyday users and smaller transactions. Base has easier onboarding due to its relationship with Coinbase.
Are they the best?
Deciding which of these Layer 2 solutions is the “best” depends on the specific needs of users and developers. Arbitrum and Base have significant advantages in terms of scalability, cost efficiency, and adoption.
However, the best solution comes down to the use case. This means whether it is for gaming, DeFi, or other applications. Regardless, these layer 2 solutions create a promising future for Ethereum’s usability and scalability.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
