Ethereum Layer 2 ecosystems like Arbitrum, Optimism, Polygon, and Metis see promising growth in 2023 with various catalysts including upcoming protocol launches, incentive programs, and upgrades.
L2 Future Bright on Ethereum
The L2 narrative remains strong as the new year begins as several significant players emerge on Ethereum.
The Ethereum ecosystem has gotten off to an impressive start to the year, with companies like Arbitrum continuing to make important strides, ZKSync opening up to builders to deploy their protocols, and Polygon zkEVM Mainnet Beta set to launch on March 27th.
Arbiscan: Active users continued to grow at Arbitrum.
Arbitrum, the Ethereum Layer 2 (L2) ecosystem, has seen impressive growth in daily transactions, Total Value Locked (TVL), and active addresses over the past six months. The ecosystem growth has been organic, with no confirmed airdrops or token incentives that can only work in the short to medium term.
With many DeFi primitives yet to be launched on Arbitrum, this growth is expected to continue despite market conditions. Additionally, Arbitrum will soon be the first Ethereum L2 to support multiple programming languages with the launch of Stylus, a programming environment upgrade in 2023.
Optimism, another Ethereum L2 ecosystem, recently partnered with Coinbase to build its standalone Ethereum L2 and work together to improve the OP stack that powers the Optimism chain.
With the upcoming Bedrock upgrade that will make Optimism the cheapest L2, its growth is expected to be exponential in 2023. Synthetix, the largest optimism-based protocol, also released Synthetix V3 less than two weeks ago, which is expected to accelerate the growth pace of the L2 ecosystem.
Other L2 ecosystems to watch are Polygon zkEVM, zkSync and Metis. Polygon and zkSync have raised over $1 billion in funding, and once their mainnets are fully launched, they are expected to announce significant incentive programs that will massively contribute to the growth of L2’s dominance. Metis is also expected to release a similar incentive program once AAVE V3 is live on the network, which could lead to significant growth in TVL and daily active users.
The future of Ethereum L2 ecosystems looks bright, and with many bullish catalysts and strong VC support, we may see more than two Ethereum L2s in TVL’s top 10 chains by the end of this year.
What is Ethereum:
Ethereum is an open-source distributed computing platform based on blockchain technology that can execute smart contracts – that is, the conditions written in the contract are transparently and automatically executed when the previous conditions are met and no one can intervene. At the same time, Ethereum also allows developers to build decentralized applications (DApps) and decentralized autonomous organizations (DAO).
More about Ethereum can be found here:
Website | Twitter | Documentation | White paper | Reddit | discord | Youtube | GitHub | Ethereum Foundation Blog |
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