On the floor, Ethereum (ETH) seems to be virtually unchanged, with round 500K each day energetic wallets and each day transactions at a baseline stage of round 1.3M. That’s as a result of a lot of the Ethereum ecosystem’s development in 2024 got here from L2 chains.
Ethereum’s significance in 2024 got here from development “hidden” in L2 chains. The principle community carried as much as 1.3M each day transactions, with no dramatic spikes in exercise. Nevertheless, Ethereum is as energetic as ever, solely scaled by its busiest L2 chains.
Throughput measures the variety of transactions and their complexity. | Supply: Growthepie
L2 exercise on the highest 5 networks led to over 400% development for the Ethereum ecosystem in 2024. By the tip of the yr, the throughput development could attain 500%, primarily based on an growth of each uncooked transactions and complicated token routing.
DEX exercise, a revival of NFTs, and stablecoin utilization all add to the enterprise of the highest L2 chains.
Ethereum serves because the settlement layer, app constructing goes to L2
For a lot of the yr, ETH remained stagnant, serving as a utility token. Nevertheless, different metrics confirmed Ethereum remained indispensable within the crypto house. L1 remains to be key to all exercise, serving as a settlement layer and for added safety. Nevertheless, app constructing is now well-established within the L2 house.
On the aspect of Ethereum, the busiest good contracts replicate demand for on-chain swaps and stablecoin utilization. Hardly ever, an outlier app will line up among the many busiest contracts. On the principle chain, the Uniswap router and Tether are the 2 greatest gasoline burners, consuming round 16% of all gasoline.
Relating to transactions at scale, the true exercise displays the expansion of L2 chains. Primarily based on the throughput metric, L2s have efficiently scaled Ethereum whereas inviting extra utilization and dealing with extra transactions.
Probably the most energetic development for a single chain comes from Base, the tokenless protocol with the bottom charges. Nevertheless, Arbitrum and Optimism have additionally added their apps, and extra currently, Taiko and Gravity boosted the full transaction depend.
At this stage, it’s comparatively exhausting to estimate which transactions are high-quality, and that are carrying low worth or are the results of bot exercise.
One of many metrics to estimate the worth of L2 chains is their capability to hold stablecoins. Arbitrum remains to be the chief, as its provide of stablecoins is on an upward trajectory. The chain could quickly carry greater than 6B stablecoins and is among the predominant targets for inflows from Ethereum.
L2 narrative shifted in 2024
The previous yr noticed a shift within the total perspective to the L2 narrative. In earlier durations, any token with a possible L2 chain was able to producing hype. Nevertheless, with greater than 100 proposed or working L2 chains, the market suffered from over-supply.
The full market cap of L2 tokens towards the tip of the yr was at $22.4B. Many of the worth was concentrated within the prime 10 cash and tokens, particularly Arbitrum and Optimism. Older legacy chains like Polygon lagged behind. Polygon solely obtained a lift from its Polymarket predictive exercise, which slowed down after November 6 and the US elections.
The opposite narrative to decelerate was ZK rollups.
For now, most L2 chains are nonetheless at ‘stage 0’, that means they nonetheless depend on a centralized sequencer. Solely Arbitrum and Optimism are Stage 1, and DeGate V1 claims to be a totally functioning decentralized ZK rollup.
Optimistic and ZK rollup chains got here to dominate the Ethereum market this yr, phasing out among the chains utilizing shards.
The opposite change in 2024 was the emergence of a marketplace for utilizing Ethereum to safe and finalize L2 transactions. L2 chains pay blob charges virtually each day whereas making an attempt to regulate their posting schedule. Lease paid to L1 was negligible for a lot of the yr however began rising within the final three months.
The highest 5 L2 chains are additionally the principle spenders on L1 transactions. Taiko stays probably the most energetic blob poster with the best bills. Nevertheless, hire paid to L1 remains to be a negligible a part of Ethereum validators’ earnings. Most validators nonetheless rely on the block subsidy for his or her earnings.
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