Ethereum Layer-2 Networks Reach Record $51.5 Billion In Total Value Locked

According to Cointelegraph, the Ethereum ecosystem is experiencing significant growth, with Ethereum-native assets attracting increasing investor interest. Ethereum layer-2 (L2) networks have achieved a new milestone, surpassing $51.5 billion in cumulative total value locked (TVL). This represents a remarkable increase of over 205% from $16.6 billion in November 2023, as reported by L2beat data. L2 scaling solutions play a crucial role in enhancing Ethereum's scalability by processing transactions on secondary chains, thereby reducing costs and wait times on the Ethereum mainnet. Despite these advantages, some industry experts express concerns that L2s might negatively impact the Ethereum mainnet's revenue and Ether (ETH) price potential. Arbitrum One and Base are the primary contributors to the surge in TVL, with Arbitrum leading the L2 ecosystem by holding over $18.3 billion in TVL, accounting for 35% of the total. Base follows as the second-largest L2 network, with $11.4 billion in TVL, representing over 22% of the cumulative L2 TVL. In the week leading up to November 28, Arbitrum's TVL increased by over 12%, while Base's TVL rose by 11.4%. Base also achieved a record 106 transactions per second (TPS) on November 26, as its TVL exceeded the $10 billion mark for the first time. The total number of Base transactions recently surpassed one billion, driven largely by the memecoin craze during this bull cycle. The Ethereum Dencun upgrade, implemented in March, has significantly boosted L2 fee stabilization, marking the most substantial network upgrade since the Merge. Nick Dodson, co-founder and CEO of Fuel Labs, highlighted that the upgrade's focus was more on fee stabilization and expanding capacity rather than merely reducing fees. Following the upgrade, some Ethereum L2s, including Starknet, Optimism, Base, and Zora OP mainnet, experienced a 99% reduction in median transaction fees. This development underscores the ongoing efforts to enhance the efficiency and scalability of Ethereum's L2 networks.