Ethereum's Layer 1 and 2 networks see significant growth, driven by lower transaction fees and robust scalability solutions, even as the broader crypto market struggles.
Ethereum's Layer 1 and 2 monthly active users have recently surpassed the 25 million milestone. This achievement comes despite stiff competition from other blockchain networks like Solana and the rising popularity of meme coins. The growth in active users is particularly noteworthy given the broader downturn in the crypto market.
To understand this milestone, it's essential to know what Layer 1 and Layer 2 refer to. Layer 1 is the base layer of the Ethereum blockchain, where transactions are processed and recorded. Layer 2, on the other hand, consists of secondary frameworks or protocols built on top of Layer 1 to improve scalability and reduce transaction costs.
Despite the overall decline in the crypto market, Ethereum has managed to grow its user base significantly. The total value locked (TVL) in Layer 2 and Layer 3 projects within the Ethereum ecosystem now exceeds $43.99 billion. This indicates a strong and growing interest in Ethereum's capabilities.
One of the key factors contributing to the increased adoption of Ethereum's Layer 2 chains is the significant decrease in transaction fees. Between June 2023 and June 2024, Layer 2 fees have dropped from $18 to just $3. Lower fees make it more affordable for traders and users to engage with the Ethereum network, thereby driving up the number of active users.
