Ethereum Mainnet Reclaims Dominance From Layer 2s

Ethereum’s base layer is seeing a resurgence in activity relative to its Layer 2 (L2) ecosystem, as the hype and incentives around newly launched L2 networks subside. According to L2beat, the combined throughput of L2 networks has dropped by 32% since reaching a peak of 64.2 transactions per second (TPS) on Sept. 14.

As of Nov. 1, the L2s are processing 43.8 TPS, while Ethereum’s mainnet averages 12.6 TPS, a slight increase from six weeks ago. L2 networks are scaling solutions that aim to reduce congestion and fees on Ethereum by moving transactions off the main chain, while still inheriting its security and decentralization. 

Some of the most popular L2s include Arbitrum, Optimism, ZkSync Era, Starknet, and Base. However, many of these L2s have experienced a decline in activity after an initial surge of users and liquidity following their launch or token distribution. 

For example, Base, an L2 network backed by Coinbase, has seen its throughput plummet from 21.3 TPS on Sept. 14 to just 3 TPS on Nov. 1. ZkSync Era and Starknet have also suffered similar drops of 50% and 53%, respectively.

Arbitrum and Optimism, the two leading L2s by total value locked (TVL), have also witnessed a contraction in their throughput, although they remain among the most active L2s with 7.3 TPS and 2.5 TPS, respectively.

Ethereum Pushes Forward Despite Obstacles

Despite the slowdown, Ethereum’s L2 project has been successful in achieving its goal of increasing the network’s capacity and lowering the costs for users. According to Vitalik Buterin, Ethereum’s co-founder, L2s are already facilitating more than four times as much activity as the mainnet, while reducing the gas fees by orders of magnitude.

Buterin also expressed optimism about the future of Ethereum’s L2 ecosystem, noting that there are still many challenges and opportunities for improvement. He said that some of the areas that need more work include cross-L2 communication, user experience, composability, and security.

He also hinted at the possibility of integrating L2s with Ethereum 2.0, the upcoming upgrade that will transition Ethereum from proof-of-work to proof-of-stake consensus mechanism. He said that Ethereum 2.0 will provide more scalability and security for L2s, as well as enable new features such as data availability sampling and fraud proofs.