CryptoTechnology

Layer-2 Blockchain Networks of Major Importance Except for Arbitrum, there has been a significant decrease in activity

Leading blockchains such as BNB Chain, Ethereum, Ronin, Polygon, Avalanche, and Celo, among others, have seen a significant decrease in on-chain activity in the last seven days, except for Arbirum, whose on-chain transactions increased by more than 12%, according to a Nansen tweet on February 28, 2022.

Layer-2 Blockchains are experiencing a decline in activity

Except for Arbitrum, all of the major layer-2 blockchain networks have suffered a dramatic fall in transaction activity in recent weeks, according to research provided by Nansen, a blockchain analytics platform that supplements on-chain data with millions of wallet labels.

Layer-2 platforms, for the uninitiated, are essentially a supplementary framework or network constructed on top of existing blockchain technology. The fundamental goal of layer–2 solutions is to address the transaction speed and scalability issues that plague major layer-1 cryptocurrency networks such as bitcoin (BTC), Ethereum, and others.

According to Nansen, seven-day activity in terms of unique addresses dropped dramatically across the major layer-2 protocols, with only the Ethereum L2 platform recording substantial growth within the same period.

The Figures

Arbitrum garnered 46,200 unique active addresses during the last week, marking a 12.7 percent rise and making it the only L2 solution to report gains for this measure in the weekly timeframe, according to the Nansen team.

In comparison, BNB Chain (previously Binance Chain) had a 2.7 percent fall in unique active addresses, Ethereum fell by 2.9 percent, Ronin fell by -22.1 percent, Polygon fell by -10.9 percent, and Avalanche fell by 14.1 percent.

Furthermore, on-chain activity in other L2 protocols, such as Fantom, Celo, and Arbitrum competitor Optimism, fell by 4.7 percent, 14 percent, and 17.9 percent, respectively.

Arbitrum presently has a 54.52 percent market share over other L2 networks, according to L2beat, with $2.93 billion in total value locked, followed by dYdX ($980 million TVL) and Optimism ($434 million TVL).

Arbitrum’s total value locked (TVL) has risen 5.7 percent in the last seven days, rising 5.7 percent since February 25. According to Defi Llama, the most popular protocol on the site is SushiSwap decentralized exchange, which has a TVL of $622.77 million and market domination of 27.99 percent.

Since reaching an all-time high of $69,000 last November, the bitcoin (BTC) price has been steadily declining, causing the same effect in the value of altcoins across the board, as well as a decrease in activity in the decentralized finance (DeFi) space, with data available on Defi Llama indicating that the TVL for major DeFi platforms is down by nearly 19% since that time.

At the time of writing, the aggregate TVL of the DeFi protocols listed on Defi Llama was roughly $233.25 billion, with Aave (AAVE) accounting for 8.09 percent of the market.

The bitcoin (BTC) price, on the other hand, has increased by 13.30 percent in the last 24 hours and is now hanging around $43,459, with the combined market capitalization of all crypto assets now lying at $1.91 trillion, according to CoinMarketCap.

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