Experts Predict L2s Will Dominate ETH Transaction Landscape Next Year

Data has shown that Ethereum’s Layer 2 (L2) solutions have experienced a remarkable surge, with transaction volume increasing from a mere 20% one year ago to approximately 64%.

Recently, prominent analytics firm Dune Analytics highlighted a dashboard created by J. Hackworth, a data scientist at Variant Fund. The dashboard has gained significant traction as it provides valuable insights into comparing activity on Ethereum’s Layer 1 (L1) and its L2 solutions.

A great dashboard by @jphackworth42 is trending ?‍♂️

It compares activity on L1 Ethereum vs its L2s ?, & shows that a lot has changed over the past year!

One year ago L2 transactions were <20% of the total, now they’re ~64% pic.twitter.com/q8dyVb7C7H

— Dune (@DuneAnalytics) June 13, 2023

The dashboard reveals that a mere 20% of transactions were conducted on L2 solutions one year ago, but that figure has since skyrocketed to approximately 64%.

Layer 2 solutions are rapidly catching up with L1, indicating a notable shift in transaction volume. In the last year alone, L2 witnessed an impressive surge of around 332,000 transactions, while L1 recorded approximately 380,000 transactions.

If the upward trend continues, experts predict that L2 solutions could dominate Ethereum’s transaction landscape within the next twelve months. The tipping point for this transformation occurred in late December 2022.

Notably, regarding active users, L2 solutions have only recently started catching up, with Q2 of this year showing substantial growth. The past week saw around 272,134 distinct L2 addresses actively engaging with the ETH network, while L1 recorded around 392,102 unique addresses.

The dashboard created by J. Hackworth sheds light on the factors driving this user growth. Recent airdrops, such as Optimism (OP) and Arbiad ARBI, have been crucial in attracting new participants to the Ethereum ecosystem.

Despite the remarkable progress made by Layer 2 solutions, Ethereum remains significantly larger than any individual L2 network. However, the surge in adoption over the past year is evident, signifying a positive outlook for Ethereum’s scalability and transactional efficiency.

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