A deep dive into L2 solutions
@AlexLutAl
What L2 solutions exist, and what is happening there now?
According to the L2Beat, the cumulative TVL of all solutions is $9.5B, of which 80.36% belongs to Arbitrum and Optimism.
Top 10 L2 solutions by TVL
How much does it cost to use L1 Ethereum and Layer 2 solutions?
The rapid growth of the L2 solution is ensured by the fact that it has become quite expensive to conduct transactions through L1 Ethereum, even in a bear market.
This article will look at the significant and fastest-growing L2 solutions: Arbitrum, Optimism, ZK Sync, Starknet, Base, Mantle and Linea.
Arbitrum (Optimistic Rollup)
Arbitrum's TVL as of 2.09.2023 is 5.27B (TVL includes canonically bridged assets, native ARB, and native USDC directly minted on Arbitrum chain).
Arbitrum's main flagship is GMX $424.48m TVL, followed by Uniswap V3, Radiant, and Aave.
Arbitrum Total accounts 8,771,271
Arbitrum business model
The number of dollars is an example: 80% of the income Arbitrum gives to l1 validators, and 20% percent remains to the Arbitrum.
Arbitrum Revenue Metrics
Annualized fees - $40.94M, which is 27 times less than Arbitrum's current market capitalization.
In March 2023, Arbitrum held a successful Airdrop by distributing ARB tokens to more than 600k users. Since then, the number of active users has almost doubled and currently stands at 140k per day.
Arbitrum has established itself as a very successful alternative to L1 Ethereum, with many tokens represented on this network, you can see the list here: https://cryptorank.io/blockchains/arbitrum.
One of the latest important news in the Arbitrum ecosystem is the official support of Circle in the native launch of USDC on Arbitrum from June 8th.
OPTIMISM (Optimistic Rollup)
TVL Optimism is $2.57B (TVL includes canonically bridges assets and native OP)
The flagship Optimism project is Velodrome Finance, followed by Synthetix, Aave, and Uniswap V3.
Optimism business model
The situation is similar to Arbitrum, where 80% of Optimism's revenue is given to L1 validators, and 20% remains to OP Labs.
Optimism revenue metrics
Annualized revenue is $37,37m, which is 27 times less than the current project capitalization (Arbitrum has the same metrics)
Active daily users
The number of active users constantly tends to grow, and at the moment is about 100k users per day.
However, unlike Arbitrum, which follows the path of vertical integration, Optimism has chosen the path of horizontal integration.
The Optimism team developed a superchain concept built on OP Stack.
The primary focus of the OP Stack is to create a shared, high-quality, and fully open-source system for deploying new rollup networks.
Currently, there are more than a dozen projects that have their superchain built on Op Stack:
1) Base 360m TVL - is a layer-2 chain developed by Coinbase and built on Optimism;
2) Aevo 6M TVL - Aevo is a high-performance, order-book-based decentralized exchange built on OP Stack;
3) Op BNB - is a high-performance layer-2 solution within the BNB ecosystem, built using the OP Stack;
4) Zora 5m TVL - NFT platform built on the open-source OP Stack, maintained by the Optimism Collective;
5) Public Goods Network - PGN is both a digital schelling point and the world’s first L2 built on OP Stack that works to create durable and recurring funding for public goods;
6) Worldcoin - Worldcoin is building the world’s largest identity and financial network using L2 on OP Stack;
7) Manta Network - The Multi-modular Blockchain for ZK, built on various blockchains, including on L2 OP Stack;
8) Kinto - is an L2 focused on providing safe and insured access to financial services. It's built on top of the Ethereum network using the OP Stack;
9) UniDex Exchange - The Defi meta-aggregator using Op Stack.
10) Mantle $36.2m TVL (previously BitDao) - Mantle is a Layer 2 network on Ethereum built on the OP stack and backed by BitDAO.
Thus, at least 400m$ TVL superchains built on OP Stack can be added to TVL Optimism.
ZK Sync ERA (ZK Rollup)
Zk Sync Era TVL is $382m$. The main projects by the amount of locked funds are:
SyncSwap - $51.98m
Mute - $19.05m
Maverick Protocol $7.84m
Zk Sync Business model
As in other L2 solutions, ZK Sync Era pays 80% of its revenue from fees to L1 validators; 20% remains to ZK Sync.
Unlike Arbitrum and Optimism, Zk Sync does not work with optimistic rollups but with ZK Proof technology, which is a more complex solution, and therefore, the growth of the ecosystem is lower than with optimistic rollups.
Zk Sync has not yet released the token and has a great potential for capital flow from other ecosystems from degens and drop hunters, which can give rapid growth to this solution.
STARKNET (Zk-Rollup)
Starknet is another L2 solution based on ZK Technology with $157m TVL.
Top projects by TVL:
Jediswap - $11,98m
MySwap - $8,34m
10kSwap - $5,76m
Starknet Business model
The business model of Starknet is similar to all the above L2 solutions, where 80% is paid to L1 validators.
Starknet fees metrics
One of the most significant events was the launch of the 8-week Explore Starknet Ecosystem campaign, where every week, users performed actions with projects from the Starknet ecosystem: token bridge, swap, NFT mint, etc.
Starknet daily active users
In my opinion, the Starknet ecosystem is growing the slowest compared to other l2 solutions.
Also, the difficulty in the rapid expansion of the ecosystem is that popular wallets such as Metamask, Coinbase, and others do not support the Starknet Network, which significantly complicates user experience, and the transaction speed is relatively low compared to other networks.
Currently, the leading wallets in the Starknet ecosystem are Braavos and Argent.
BASE (Optimistic Rollup)
The Base is an Optimistic Rollup built on the Op Stack. The Base is incubated within Coinbase.
BASE TVL is - $369m
TOP projects by TVL:
1) Aerodrome - $189,38m
2) Beefy - $32,51m (yield aggregator)
3) Overnight Finance - $28,84m
Base business model
Base revenue metrics
Fees (annualized) - $49,46m, which exceeds the collected fees of all the aforementioned L2 solutions. August 2023 was very successful for the BASE network, let's see how the metrics develop further.
Interesting fact: Base is the fastest growing layer 2, having gained 1 million unique addresses in 11 days from its official mainnet launch.
Base Network's recent large-scale integrations:
1) Leading DeFi protocol, 1inch, has launched its products on Base Network,
2) Decentralized Exchange Uniswap (UNI) has launched on Coinbase-Backed Layer-2 Base
3) PancakeSwap Launches on Base
4) Compound Launches Defi Protocol on Coinbase Layer 2 Base
As we can see, the most significant defi blue chips integrated in just a month, L2 solution Base.
Particular attention should be paid to the Friend Tech project.
August 10 2023 was the launch date of friend.tech, which is becoming one of the top dApps on Base, topping the charts in revenue and fees generated.
Source: Coingecko
As reported by Dune analytics, friend.tech has recorded over 85,000 buyers (or users) since its launch on August 10, 2023.
MANTLE (Optimistic Rollup)
Mantle Network is an optimistic rollup built on OP Stack and launched by the BitDao team.
It incorporates EigenLayer's EigenDA for data availability and utilizes multi-party computation, resulting in improved performance and lower costs. (source)
Mantle Network TVL is $89,52m
Leading L2 solutions in the Mantle Ecosystem by TVL:
Agni Finance - $20,58m
Izi Swap - $10,49m
Fusion X Finance - $2,75m
On July 17, 2023, Mantle announced that its network is open for public use as it enters its mainnet stage.
LINEA (Zk Rollup)
Linea is a Layer 2 scaling solution for the Ethereum blockchain based on zero-knowledge technology.
Linea is being developed by Consensys - the one of the most influential web3 companies
Linea TVL is $42,73m
TOP Projects by TVL:
1) Velocore - $3,46m
2) KyberSwap - $2,78m
3) SyncSwap - $2,18m
Here you can find a list of DAPPS that work on Linea L2 solution
A few months ago, Linea successfully launched a campaign on the Galxe, which has attracted a large number of users.
More than 2m people participated in this Ecosystem campaign.
What is the fastest growing layer 2?
Layer 2 solutions to be launched in 2023-2024:
3) https://scroll.io/ (ZK)
4) https://taiko.xyz/ (ZK)
5) https://obscu.ro/
6) https://intmax.io/ (ZK)