By Ethereum layer-2 scaling solutions are booming with total value locked (TVL), which refers to the amount of assets staked or deposited across leading platforms like Arbitrum, Optimism, and Base, exceeding $36.7 billion.
According to L2Beat, Arbitrum One, one of the earliest layer-2 solutions for Ethereum, has a TVL of $15.7 billion, nearly double that of its closest competitor, Optimism. This dominance is likely due to its first-mover advantage and security edge.
The spike in TVL in Ethereum layer-2 platforms could suggest rising demand for faster and cheaper transactions. Notably, the expansion in assets under management comes behind surging crypto and Ethereum prices.
As of March 5, Ethereum was changing hands at approximately $3,700. Though it has seen correction past 24 hours, the coin was up 13% in the previous trading week.
Others, including the ARB and OP, the native tokens of Arbitrum and Optimism, respectively, have posted gains in recent weeks.
ARB is trading at $2, up 6% in the last week. The token now has a market cap of over $2.5 billion, securing a slot in the top 50 most valuable coins, according to CoinGecko data.
Layer-2 Solutions Gain Traction
Layer-2 scaling solutions have gained traction over the past few years, with more platforms launching. To illustrate, Blast and Base, two platforms using optimistic rollups, recently launched but now have a TVL of over $2.7 billion and $1.1 billion, respectively.
Crypto users and protocols prefer these platforms because they offer higher scalability and low fees. At the same time, they are secure since they derive their security from Ethereum.
The upcoming Dencun hard fork will further lower fees and improve efficiency. The update aims to make layer-2 transactions cheaper, laying the foundation for even more scalability advancements on Ethereum.
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