Analyzing the performance of L2 solutions amidst market unrest
- Layer 2 solutions like Arbitrum, Optimism and Polygon showed consistent growth.
- Polygon dominates the L2 sector with high activity.
The recent lawsuits filed by the SEC against major cryptocurrency exchanges Coinbase and Binance, coupled with the FOMC announcement, have increased fear, uncertainty, and doubt (FUD) within the crypto market. However, amid this growing uncertainty, layer 2 (L2) solutions are defying the odds and demonstrating significant growth.
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L2s scaling faster than ever
The scaling factor represents the multiplier by which transaction processing capacity and performance improve in comparison to the L1 network. For instance, an L2 protocol with a scaling factor of 100x can handle 100 times more transactions per second (TPS) or process smart contracts at a speed 100 times faster than the L1 blockchain.
In terms of TPS, these layer 2 solutions have also witnessed remarkable growth. At present, the TPS for these solutions stands at an impressive 47.22, showcasing their capacity for efficient transaction processing.
When it comes to activity, Polygon continues to dominate the L2 sector with a significant number of daily active addresses, currently totaling 475,860. Meanwhile, Arbitrum and Optimism trail behind with 176,880 and 149,060 daily active addresses, respectively.
Polygon’s activity dominance is primarily fueled by the increasing number of transactions occurring on its network. Although Optimism is currently positioned behind Polygon and Arbitrum in terms of both activity and transaction volume, it has shown a noteworthy surge of interest in recent times, making it a formidable contender in the L2 race.
State of the tokens
In the realm of token interest, market capitalization for tokens such as MATIC, ARB, and OP has experienced a decline. This dip in market caps can potentially be attributed to the recent SEC lawsuits. Notably, OP’s market capitalization witnessed a significant surge before eventually falling.
Realistic or not, here’s OP’s market cap in BTC terms
Only time will tell whether this price correction is a temporary setback or indicative of a more significant trend in the market for OP. Furthermore, alongside the decline in market capitalization, the network growth of these tokens has also slowed down, suggesting a decreased level of interest among new addresses.