Ethereum’s Layer-2 Dominates Transaction Activity: A Dive into Messari’s Findings

Messari’s State of Ethereum report highlighted that Ethereum’s Layer-2 networks accounted for a staggering 61% of all transactions in the third quarter. This surge in activity is attributed to the meteoric rise of Base, which momentarily surpassed transactions on Ethereum’s mainnet, and the unexpected traction gained by the Friend.tech social token platform.

Kunal Goel, Messari’s senior research analyst, expressed his astonishment at this development. He emphasized the rapid growth of Base and the significant impact a single application can have on a blockchain’s trajectory. Goel pointed out the challenges new chains face, often termed the “cold start problem.” However, platforms like Friend.tech play a pivotal role in overcoming these hurdles by attracting users and capital.

Despite the promising figures, Goel remains cautiously optimistic, noting the prevailing bear market sentiments.

Base, incubated by the renowned Coinbase, has witnessed exponential growth since its inception in early August. With a total value locked (TVL) of $448 million, as reported by 21.co’s Dune dashboard, Base firmly secures its position among the top four layer-2 solutions. It stands alongside giants like Arbitrum, Optimism, and zkSync Era.

Arbitrum, with its 600,000 average daily transactions, remains the preferred choice for Ethereum users. However, its dominance is being challenged by emerging contenders like Base and Optimism, which have significantly impacted Arbitrum’s network activity.

Eliezer Ndinga, 21.co’s head of research, resonated with Goel’s insights, emphasizing the inherent scalability limitations of blockchains. Drawing parallels with the evolution of the internet, Ndinga likened layer-2 solutions to the transition from dial-up connections to high-speed bandwidth, pushing the boundaries of possibilities.

Ndinga’s bullish stance on layer-2s is evident, especially as they gain traction among reputable financial institutions.

Goel’s revelations provide a promising outlook for the Ethereum community. He believes that the increasing activity on L2s will bolster their market caps and, in turn, demand higher security from Ethereum. The focus now shifts to the potential cost reductions L2s can achieve post the Dencun upgrade and the subsequent activity surge due to reduced transaction fees.

In Goel’s vision, the future sees all DEX trades transitioning to L2s, capitalizing on the benefits of lower transaction fees, especially for high-velocity transactions.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Bullish Times is a marketing agency committed to providing corporate-grade press coverage and shall not be liable for any loss or damage arising from reliance on this information. Readers should perform their own research and due diligence before engaging in any financial activities.