ETH Layer2 Lockup Decreases by 2% in the last 7 days: Report

04/28/2023 06:46 • Crypto & Markets • 57 views

According to reports, L2BEAT data shows that as of now, the total lockup on Ethereum Layer2 is $9.56 billion, a decrease of 2% in the past 7 days. Among them, the highest lockdown volume is the expansion plan Arbitrum One, which is about 6.37 billion US dollars, accounting for 66.63%, followed by Optimism, which has a lockdown volume of 1.93 billion US dollars, accounting for 20.18%. The total lockdown volume of the Dydx network is 337 million US dollars, accounting for 3.21%.

The current total lockdown on Ethereum Layer2 is $9.56 billion

As per recent reports released by L2BEAT data, the total lockup on Ethereum Layer2 has decreased by 2% in the past 7 days and currently stands at $9.56 billion. In this article, we will take a deep dive into the details of the report and examine the current state of the Layer2 network.

Understanding the Ethereum Layer2 network

Before we delve into the specifics of the report, let’s first understand what the Ethereum Layer2 network is. Layer2 is a scaling solution that helps to avoid congestion on the main Ethereum blockchain by offloading some of the heavy computation to sidechain networks. Layer2 protocols support faster and cheaper transactions, making them an attractive alternative to the Ethereum mainnet.

Analysis of the L2BEAT data report

According to the L2BEAT report, the highest lockdown volume on the Layer2 network is the expansion plan Arbitrum One which accounts for 66.63% of the total lockup, with a volume of about $6.37 billion. The second-highest network with lockup volume is Optimism, with a total lockup of $1.93 billion accounting for 20.18% of the total volume.
Dydx network ranks third in terms of lockup volume with a total of $337 million, accounting for 3.21% of total lockup on the network. The remaining lockup on the network is distributed across various other Layer2 networks.

Reasons for the decrease in lockup volumes

Although Layer2s have been gaining popularity in recent times, the decrease in lockup volumes on Ethereum Layer2 can be attributed to several factors. Firstly, the rising gas fees on the Ethereum mainnet have made the Layer2 network a more attractive alternative, leading to a surge in lockup volumes over the past few months. However, with the recent decrease in gas fees on the Ethereum mainnet, there could be a shift back towards the mainnet, leading to a decrease in Layer2 lockup volumes.
Additionally, some users could be wary of the risks associated with the Layer2 network, including the possibility of protocol failures, smart contract vulnerabilities, and even fraud or theft.

Conclusion

In conclusion, the Ethereum Layer2 network has been gaining popularity in the wake of rising gas fees on the Ethereum mainnet. However, the recent decrease in lockup volumes on the network could be attributed to a decrease in gas fees on the mainnet and concerns prevalent in Layer2s. While the Layer2 network is designed to provide faster and cheaper transactions, it is crucial for users to be fully aware of the risks involved.

FAQs

1. What is the reason behind the decrease in lockup volumes on the Ethereum Layer2 network?
Ans: The decrease in lockup volumes can be attributed to the decrease in gas fees on the Ethereum mainnet and concerns prevalent in Layer2s.
2. Which Layer2 protocol has the highest lockup volume on the network?
Ans: The expansion plan Arbitrum One accounts for 66.63% of the total lockup volume on the network, which is the highest among all Layer2 protocols.
3. What is Ethereum Layer2 network?
Ans: Layer2 is a scaling solution that helps to avoid congestion on the main Ethereum blockchain by offloading some of the heavy computation to sidechain networks, providing faster and cheaper transactions.

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