The TVL on Ethereum layer two (L2) networks has increased to a new record as gas fees continue to rise, driving further adoption.
L2beat, a layer 2 analytics platform, has revealed that the total amount of value locked across several L2 protocols and networks has registered a new ATH of $5.64 billion.
L2 scaling solutions offer higher transaction throughput and lower transaction fees, and have increased in terms of adoption this month, which has recorded the highest average fees in the history of the Ethereum network.
Arbitrum owns the largest part of the L2 market with $2.67 billion locked up, which would represent about 45% of the total. The second place goes to dYdX decentralized derivates exchange with $975 million in TVL, while the third place is occupied by Loopring L2 DEX with $580 million. It is worth mentioning that its own LRC token makes up most of its value locked.
Layer 2 TVL has doubled since October began, increasing by 110% from $2.68 billion to the current level.
Bitinfocharts reports that the average Ethereum transaction fee is worth about $40. On November 9th, gas fees reached their second-highest ever level when they had a value of $65. This has increased by 700% over the previous four months.
Gas prices, of course, vary based on the operation. For example, a simple ERC-20 token transfer can have a fee of about $45 (at least, at the moment), but a more complex smart contract interaction or Uniswap swap can ask for a ridiculously high fee of $140, reveals Etherscan.
Simply registering a name on the Ethereum Name Service can cost you hundreds of dollars in gas – this is, despite the fact that the actual domain name doesn’t cost more than a couple of dollars per year.
As a result, beginning with October, multichain compatible DeFi platforms have recorded increasing inflows as investors and developers looked to avoid the Ethereum network because of the increased gas fees.