Ethereum Foundation contributor Josh Stark has made a significant observation regarding the Ethereum-based ecosystem of second-layer networks. In a recent development, he noted that the aggregated value locked in Ethereum-based L2 protocols has surpassed that of all non-Ethereum blockchains, marking a historic milestone for the Ethereum (ETH) L2s.
Stark pointed out that the total value locked in Ethereum L2 protocols reached $20.7 billion, while the combined value of assets on non-Ethereum blockchains amounted to $19.6 billion as of January 4, 2024. This achievement underscores the growing significance of Ethereum’s second-layer networks in the broader crypto landscape.
It’s important to note that the comparisons made by Stark are not an apples-to-apples assessment. The value locked in second-layer networks represents the assets present on L2, including native tokens, while the metrics for non-Ethereum blockchains reflect the assets locked in dApps on those respective blockchains.
To arrive at these findings, Stark utilized data from L2Beat to track second-layer blockchains and DefiLlama to analyze non-Ethereum L1s, providing a comprehensive overview of the evolving landscape of blockchain ecosystems.
What makes this development even more noteworthy is the historical context. Back in September 2021, Stark had solicited opinions from his audience regarding the timing of the “L2-over-L1” flippening. The fact that 20% of respondents believed this milestone would never occur is both a testament to the rapid evolution of the crypto industry and a reminder of the resilience of traditional blockchain networks.
The resurgence of Ethereum’s L2s is particularly striking given that in the past, these networks were significantly smaller compared to L1s. However, as evidenced by the recent achievement, the gap has now narrowed substantially, with the ecosystem experiencing exponential growth in terms of total value locked.
Furthermore, L2Beat’s data reveals that the dominance of the top five L2 networks – Arbitrum (ARB), OP Mainnet (Optimism, OP), Base, Metis Andromeda, and Manta Pacific – accounts for over 90% of the total value locked in Ethereum’s L2s. Among them, Arbitrum stands out as the largest Ethereum-based L1, reclaiming its dominance and inching closer to the 50% mark.
This resurgence is not limited to Arbitrum alone—the overall ecosystem of Ethereum’s L2s has seen a remarkable surge, with the total value locked jumping to an all-time high of over $20.78 billion. This represents a staggering increase of over 330% in just one year, signaling the tremendous growth and potential of Ethereum’s second-layer networks.
As the crypto industry continues to evolve, these insights shed light on the shifting dynamics within the blockchain ecosystem, highlighting the growing importance of Ethereum’s L2 protocols and the broader implications for the crypto industry at large.
