Ethereum L2s dominate: Unveiling the market insights

• zkSync generated over $4 million in fees in the last 30 days.
• The fee generated is the highest fee among L2s.

Certainly, Ethereum [ETH] layer 2 networks have been quite active over the past month. However, the fees they generated differed. Recent data indicated that zkSync has outperformed the other layer 2 solutions in terms of fee generation during this period.

Read Ethereum’s [ETH] Price Prediction 2023-24

To what extent has zkSync dominated in generating fees, and what is the current state of key network metrics?

zkSync leads race in L2 fees

As per a recent report from Coin98analytics, zkSync generated the most fees among the analyzed Layer 2 (L2) networks in the past 30 days. During this period, zkSync accrued $4.1 million in fees.

However, other L2 solutions, including Arbitrum [ARB], Base, and Optimism [OP], generated $2.2 million, $1.4 million, and $1.35 million, respectively. 

Source: Coin98Analytics

Layer 2 networks, or L2s, leverage the security of an underlying Layer 1 blockchain to facilitate faster and more cost-effective off-chain transactions.

Although cryptocurrencies like Bitcoin [BTC] have their own L2 solutions, Ethereum’s offerings, including zkSync, appear to be particularly popular.

It’s worth noting that while the fees generated by these L2 networks are commendable, Ethereum, understandably, continues to witness significantly higher daily fee volumes.

As of the time of this writing, the daily fees for Ethereum, as reported by Crypto Fees, exceeded $3 million.

How the zkSync volume and TVL has fared

The Total Value Locked (TVL) chart provided by DefiLlama indicated that zkSync’s TVL trend has not shown significant growth in recent months. The chart revealed a relatively stable TVL over the past couple of months, with the press time TVL standing at approximately $115.5 million.

However, it’s important to note that despite the relatively flat TVL trend, there has been noticeable activity when it comes to trading volume.

At the time of this writing, the trading volume in the last 24 hours reached nearly $63.5 million. This heightened trading activity helps explain how zkSync managed to generate substantial fees.

Increased trading volume is often associated with higher transaction activity, which, in turn, results in greater fee generation.

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How the TVL stacks up

According to data from L2 Beats, the TVL in L2 solutions was around $12 billion at the time of this report. Among the various L2 solutions, zkSync held the fourth-highest position in terms of TVL contribution.

Its contribution accounted for a 3.79% share of the market, with Arbitrum being the dominant player in the L2 space, holding the controlling share.