Ethereum Layer-2: historical record for the total value locked (TVL) of $21 billion

The total value locked (TVL) of Ethereum has recently reached its all-time high, recording an impressive figure of 21.16 billion dollars. This represents a significant increase of 333% compared to the beginning of January 2023. 

Despite the significant increase in TVL in Layer-2, Ethereum prices remain stable at $2,245, marking a 54% decrease compared to the peak recorded in November 2021, when they reached $4,878. Let’s see all the details below. 

TVL: Ethereum’s layer-2 reaches a new all-time high

As anticipated, according to the data provided by the L2beat platform, Ethereum’s layer-2 ecosystem has recently reached a new record in Total Value Locked (TVL), reaching $21.16 billion on January 3rd.

This figure even exceeds the amount locked in all decentralized finance protocols (DeFi) in January 2021.

The TVL layer-2 has experienced a 34% increase in the last month, reaching the current level of 20.8 billion dollars, positioning itself just below the recorded peak. 

During the last year, the TVL layer-2 has recorded a significant growth of 333%, starting from around 4.8 billion dollars at the beginning of January 2023.

In comparison, DeFi markets have seen a 38% increase in terms of TVL during the same period, according to DeFiLlama.

On January 4th, the analyst Metaquant interpreted this scenario as a rotation from layer-1 ecosystems to layer-2 solutions on Ethereum. Solana and Avalanche, competitors of Ethereum, have recorded increases in recent weeks, but now they seem to be slowing down.

In addition to the TVL layer-2 peak, there is a constant increase in daily active addresses, level 2 fees, and market capitalization of level 2 stablecoins. 

However, ETH prices have remained in the background due to the focus elsewhere, as highlighted by the analyst who predicts: 

“Once the price of (ETH) increases, everyone will return to Ethereum and layer-2 solutions.”

Finally, the data shows that Ethereum’s layer-2 TVL surpasses the sum of all other layer-1 chains, as reported by analyst “Josh,” who highlights the future return of investors to Ethereum and layer-2 solutions.

Arbitrum One leading the Layer-2 market

Anyway, it is Arbitrum One that confirms itself as the market leader with about 10 billion dollars of TVL, holding almost 50% of the market share.

Optimism (OP Mainnet) instead ranks second with $5.8 billion in TVL and a market share of 28.7%.

The other layer-2 platforms are relatively smaller, with Metis Andromeda and Base occupying the third and fourth positions respectively, each with around 750 million dollars of TVL.

Pectra and all the upcoming evolutions of the Ethereum network

On January 4th, during the first All Core Devs Execution (ACDE) meeting of 2024, Ethereum developers outlined the path of Pectra in empowering decentralization through the implementation of Verkle Trees.

During the session, the dates for the test network distributions of Dencun were established, with the initial launch on Goerli set for January 17th. Subsequent distributions will follow on Sepolia and Holesky on January 30th and February 7th respectively.

Despite concerns from some dissidents regarding the short 13-day time window to make changes post Goerli, the next ACDE call is scheduled for January 18th. 

This will provide flexibility in planning in case adjustments to the approach are needed.

In addition, an Ethereum customer provider tweeted the following: 

“Most other clients believe that the timing, although ambitious, is acceptable.”

They are waiting for the release of the clients for Goerli in the next week, followed by Sepolia/Holesky in the week of January 22nd, provided that everything goes as planned.

Dencun, through the implementation of EIP-4844, also known as proto-danksharding, aims to significantly reduce transaction fees for Layer 2 rollups by replacing call data with lower gas-consuming blobs. 

This step will have a positive impact on the availability of data on Layer 2, contributing to shaping the future of the Ethereum network.