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Layer 2 protocols, including Arbitrum, Optimism, and Zksync, have observed significant growth since their inception.
The overall crypto market is currently experiencing turmoil due to the tensions between Israel and Iran. Meanwhile, various Layer 2 protocols have been observing steady growth over the past few months.
The current market cap for the overall Layer 2 category is around $22 Billion and has increased over 4% in the past 24 hours. Meanwhile, the overall traded volume of the category has plunged by 38%.
Let’s have a look at the Top 5 Layer 2 protocols to assess how they are performing.
ZkSync ( Lite+Era)
zKSync is a layer 2 protocol that is scaling Ethereum with its cutting-edge ZKTech. They can inherit 100% of the Ethereum security using their Roll-Ups. More than 230 million transactions have taken place on this network since its inception. There are also more than 1 million contracts on the network with $6M+ deployed.
The Total Value Locked (TVL) of ZkSync Era is $157 million, and the stablecoin market cap of Lite is $14.65 million. The net inflow in the protocol has remained stable in the range of $5 million.
The Total Value Bridged (TVB) across the supported protocols is around 3,530,340 ETH, with a total bridgers count of 2,841,295. Meanwhile, the overall daily bridge combining the
(era+lite) has remained fairly stable. Many analysts are speculating a solid rise in the TVB in the coming months.
StarkNet Bridge
Starknet claims to be the most secure scaling technology that can bring the benefits of Ethereum to the real world. It utilizes stark technology to ensure computational integrity. By validating the off chain transactions, Starknet overcomes the Ethereum scalability limitations. It also offers an efficient and user-friendly experience by employing native account abstraction. Meanwhile, Cairo, Starknet’s official smart contract language, allows developers to push their limits.
Starknet has a total TVL of $254 Million that has surged significantly after Feb 2024.
Meanwhile, the overall core developers have remained significantly stable from the start of this year. The derivative volume on the protocol has seen a surge of 200% and reached $1.33 Billion.
The overall TVB for the protocol is 897,575 ETH, with a total of 159 bridgers in the last seven days. NOSTRA chain of the Starknet has the highest bridges with a TVL of
$169 million, which has decreased by 18% in the last seven days. However, the overall number of depositors has gone down significantly, as per the data by Dune.
Arbitrum
Arbitrum is the third largest layer2 protocol with a market cap of $3.2 Billion. The protocol makes it possible for the developers to leverage Ethereum security for the next-gen dApps. The ARB token has a total holder count of 30795 and a total transfer value of 182470. Arbitrum TVL has grown by $1 Billion since the start of 2024.
Meanwhile, the overall fee collected from the protocol has seen a decline to $20k in April 2024. The average revenue of the Arbitrum is nearly $15k for the past two months. The net Inflow for Arbitrum has remained negative for a significant period in 2024.
The total TVB for Arbitrum has been observing stagnation for the past few months.
The overall daily bridgers have seen no significant growth, as per the data by Dune. Many analysts expect an overall rise in TVB for ARB in the near future.
Optimism
Optimism is a layer 2 protocol utilizing the Optimistic rollups to scale the overall Ethereum ecosystem. It is the home to more than 150 protocols and utilizes Ethereum security for development. It is mainly designed around four core tenets: simplicity, Pragmatism, Sustainability, and Optimism.
Optimism has an overall TVL of $864 Million, with a surge of $100 Million from January to April 2024. Meanwhile, the overall revenue of the protocol has seen a slight growth, with an average revenue of $40k.
The overall inflow of the protocol has been in the range of -5 million in the past two months. The overall bridgers value of Optimism have also remained static.
The total number of depositors on the Optimism protocol has seen a significant decline from 500 to 60. Meanwhile, the overall ETH deposited has remained relatively stagnant.
Conclusion
The overall market cap for the Layer 2 protocols has been on the rise. Meanwhile, the top protocols have started seeing a better ecosystem and dApps to increase the overall scale of Ethereum. Various analysts are speculating a growth of up to 5X for layer 2 protocols in the upcoming years.
Disclaimer
The views and opinions stated by the author or any other person in this article are for informational purposes only and do not constitute financial, investment, or other advice.
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
