Layer 2 Networks have become increasingly popular as they provide scalability, lower fees, and faster transaction speeds than the Ethereum base layer. Layer-2s are increasingly showing their potential with the introduction of Ethereum Virtual Machine (EVM) zero-knowledge rollups (zkEVM). According to TradingPlatforms.com, L2s have overtaken the base layer of Ethereum on transactions per second (TPS) with a Scaling factor of 2.58x. This marks the first time that L2s have surpassed Ethereum’s base layer on TPS, providing a significant boost for the growth of the layer-2 ecosystem.
According to TradingPlatforms, Edith Reads, “The rise of Layer 2 networks is a major milestone for the crypto space as it signals that blockchain technology is able to finally scale. This can help pave the way towards mainstream adoption of DeFi and other use cases.”
The L2 growth is primarily attributed to zkSync’s launch of its version 2.0 mainnet. Short for Zero-Knowledge, zkSync is a resourceful network that offloads the traffic of Ethereum and eliminates hefty transfer fees. This second-layer technology aids in relieving the mainnet from congestion, thus earning its title as a scalability solution to Layer 1 networks such as Ethereum.
Furthermore, with zkEVMs, developers have more flexibility in creating applications as they can operate natively on L2. As dApp functionality can be increased by having access to zero-knowledge verification protocols, the analysts estimate that most applications on Ethereum today will likely move to L2. Polygon’s zkEVM will be rolled out in 2023, adding further variety and increasing the uptake of L2.
The introduction of zkEVMs has shown immense potential to revolutionize the blockchain space, with layer-2s such as zkSync already proving its capabilities by surpassing Ethereum’s base layer on TPS. With more and more scalability solutions launching soon, the growth of L2s is set only to increase.
Ethereum L2 ecosystem is set to expand even further, with more developers taking advantage of zkEVM protocols. Layer-2s are likely to become mainstream technology for scalability in 2023 and beyond. Arbitrum One and Optimism remain industry leaders in terms of market dominance, but more competition from new players will increase competition.
Overall, the Ethereum layer-2 ecosystem has grown significantly despite the crypto winter. This growth shows that there is still immense potential for L2s in the industry and that they could be a significant player in unlocking blockchain technology’s full potential.
Edith is a finance expert who has been writing and trading for years. She's knowledgeable about stocks, cryptocurrencies, blockchain technology as well the latest fintech trends - all from an informed perspective that will help you make better decisions when it comes time to invest your money.
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