Ethereum (ETH) Layer-2 Networks Surpass $1 Billion in TVL

Ethereum (ETH) Layer-2 Networks Surpass $1 Billion in TVL

Slowly but surely, Layer 2 scaling techniques are becoming platforms of choice for a variety of dApps. In early Q4, 2021, L2 adoption of Ethereum (ETH) accomplished its massive milestone.

Ethereum's L2s smashed $1 billion threshold

According to data shared by L2Beat, the net value of various assets locked in the liquidity mechanisms of protocols that are using second-layer solutions for Ethereum (ETH) scalability surpasses $1 billion for the first time in history.

This indicator added 12.6% in the last seven days; it is more than double last month. In mid-August, it surpassed the previous highs registered amidst May's Ethereum (ETH) rally.

DeFi veterans dYdX and Optimism are responsible for almost 50% of this monstrous value. Early-stage solution Nahmii contributed to 16% of this indicator, yet its liquidity is allocated in the protocol's own tokens.

The protocols listed by L2Beat are developing products in the sphere of exchanges, payment solutions, multi-purpose liquidity aggregators, NFT marketplaces and DAOs.

ZK-rollups lead the way

The protocols adhere to various models of Ethereum scalability. Almost half of them utilize zero-knowledge rollups (ZK-rollups). This technology allows users to rollup data from multiple transactions into a single batch and reduce the costs of on-chain computations.

Optimistic Rollups is another popular technology, while some protocols are using the Plasma, Validium and State Pools designs.

As covered by U.Today previously, on the eve of the Cardano (ADA) smart contracts release, IOG devs published a comparison of Ethereum's L2 scenario Arbitrum and Cardano's Hydra.