– Data from L2Beat shows that Ethereum layer 2 networks have reached a milestone of $13 billion in total value locked (TVL) within their contracts.
– This trend of greater interest in layer 2s is expected to continue, although challenges remain in user experience and security.
– Prior to June 15, layer-2 TVL had been declining, but it turned positive and reached a new high of nearly $12 billion by Oct. 31.
– Investment in layer 2 apps continued to climb, surpassing the $13 billion TVL mark on Nov. 10.
– Layer 2s have seen significant growth compared to the bull market of 2021, despite the overall crypto market cap being smaller.
– High gas fees on Ethereum during the bull market led users to seek alternatives, contributing to the growth of layer 2 networks.
– Successful marketing efforts by layer 2 development teams have attracted high user activity and yields.
– Layer 2s still face challenges in user experience, with some networks requiring a seven-day withdrawal processing time.
– Centralization is another challenge for layer 2s, as it goes against the core principles of decentralization and trustlessness.
– Competition from layer 2s is expected to drive improvements in layer 1 networks, leading to higher scalability at the foundational layer.
– The number of layer 2s continues to increase, with OKX and Kraken rumored to be building their own layer 2 networks.