Crypto prices have risen continuously since the beginning of 2023. In addition to Bitcoin and Co., many altcoins have also exploded. Many of these are part of Ethereum’s Layer 2 network. This growing overall network generates the largest total value of any blockchain today. Ethereum’s Layer 2 networks alone counted a Total Value Locked (TVL) of more than $19 billion, reaching (another) all-time high in December. That’s – based on all the headlines surrounding emerging Layer 1 blockchains – almost four times the entire Solana network. Arbitrum, Ethereum’s largest Layer 2 chain, is almost twice as large.
Comparing the (fully diluted) total market capitalization of both protocols ($14 billion for Arbitrum versus $60 billion for Solana) reveals a discrepancy in fundamental valuation. The comparison also reminds us that Ethereum is still in a league of its own when it comes to DeFi.
All-time high in stablecoin market cap
The stablecoin market capitalization of a blockchain is a sign of liquidity. Even if it is still a long way from the standards on the main chain: In the layer 2 sector, the stablecoin market capitalization reached an all-time high several times in 2023, most recently in December. In total, the four largest blockchains – Arbitrum, Optimism, Base and zkSync – have almost three billion US dollars in stablecoins tied to the respective networks. Most dominant: Arbitrum, the most popular L2 Ethereum in DeFi.
What you should know about the Layer 2 sector on Ethereum and what the cryptocurrency is like in general you can find out in the new BTC-ECHO Ethereum Report.
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