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Ethereum Layer 2 Base Shatters Record

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Following Ethereum’s Dencun upgrade, Base’s TVL metrics reach unprecedented levels. Data from L2 Beat shows that the total value locked hit a new all-time high of $2.16 billion. The current total locked-up volume of the Ethereum Layer 2 network is $36.6 billion. Despite occupying fourth place, Base’s 7-day TVL growth has nearly doubled. The hard fork implemented Ethereum Improvement Proposal 4844, which reduces layer 2 transaction fees by introducing innovative features called data blobs or proto-dank sharding.

As earlier reported, the estimated gas costs associated with a DEX swap are: the gas fee for Aribitrum is estimated to be reduced from $2.02 to $0.4, Optimism from $1.42 to $0.28, and Base from $0.58 to $0.01.

Notably, Base handled about 440,000 transactions before Dencun. However, this figure swiftly reached two million following the upgrade. A few days after the Dencun upgrade, daily transactions on base jumped to a record 2 million on March 16. With growth on the network showing no signs of slowing down, the network was poised for more. 

Additionally, new users on Base have notched up an all-time high. In mid-March, just days after the upgrade was triggered, the figure hit 666,866, an average of 3,000% surge. Although Dencun brought a reduction in transaction fees, which led to a spike in network demand, this uptick proved to be short-lived.

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Ethereum Layer 2 Base Shatters Record 2

Amid a surge in network metrics, gas fees skyrocketed by a staggering 2000% on March 20, reaching an average of $2 during periods of intense network congestion. Although fees swiftly returned to their usual $0.2 level as activity levels subsided, they surged once more over the weekend, reaching $1.9—an 1100% increase.

Ethereum L2 Fees Culprit

Insight from prominent on-chain data investigator Michael Silberling suggests that the influx of trading bots onto the network has translated into increased demand and prices for meme coins on Base, consequently leading to elevated gas fees.

Launched by Coinbase in August, Base is the 4th largest network in the Ethereum layer 2 ecosystem, with a 5.7% market share. Arbitrum and Optimism still dominate the Layer 2 ecosystem, with a total TVL of $24 billion and market shares of 42% and 23%, respectively.

Ethereum’s Vitalik Buterin Supports Improving Basic Blockchain Features

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Vitalik Buterin, the co-founder of Ethereum, has recently voiced his support for bolstering advanced features at the layer 1 (L1) level within blockchain architectures, diverging from his previous stances. In a recent communication via X, Buterin emphasized the importance of addressing complexities at the foundational level to alleviate pressures on layer 2 (L2) solutions. His shift in perspective underscores a growing awareness of the risks associated with errors occurring at different layers of blockchain systems.

Buterin’s concerns primarily revolve around the potential consequences of bugs or failures within L2 solutions, which could result in significant financial losses for users. He highlights the relative ease with which L1 consensus failures can be addressed by core developers, contrasting them with the potentially irreversible impacts of L2-level errors. To mitigate these risks, Buterin advocates for the incorporation of more sophisticated features at the L1 level, easing the burden on L2 solutions and streamlining development processes for both developers and users.

Ethereum Leads The Way: A Dive Into Layer 2 Expansion

In an in-depth exploration of the Ethereum layer 2 ecosystem published in October, Buterin spotlighted the rapid expansion and increasing diversity of L2 projects. Ranging from EVM-compatible rollups like Arbitrum and Optimism to innovative initiatives such as Linea and Zeth, the landscape of L2 solutions is evolving rapidly. Buterin observes a growing trend towards greater heterogeneity among L2 projects, with many aiming to align themselves with Ethereum’s ecosystem or explore novel blockchain-based security enhancements.

However, Buterin cautions against seeking a singular, universal solution for Ethereum’s L2 challenges, noting the complex and multifaceted nature of the blockchain platform. The absence of a “one-size-fits-all” approach underscores the need for ongoing experimentation and innovation within the Ethereum community to address the diverse array of challenges and opportunities presented by L2 scalability and security.

Buterin’s advocacy for enhanced L1 features represents a significant evolution in his thinking and highlights the ongoing dialogue within the blockchain community regarding the optimal balance between L1 and L2 solutions. As Ethereum continues to navigate these complexities, the insights and perspectives shared by Buterin serve as valuable contributions to the broader discourse surrounding blockchain architecture and development.

Ethereum Name Service Explores L2 Amid Mainnet Buzz

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Ethereum’s Dencun hard fork has successfully deployed on the Holesky at epoch 29696 [February 7th, 11:35 UTC], clearing the way for its mainnet launch. Numerous prospective projects are causing quite a stir in the community. Among the most noteworthy of these is Ethereum Name Service, whose executive director, Khori Whittaker, revealed intentions to investigate developing a protocol on the Ethereum L2 network and might introduce a dedicated L2.

Whittaker disclosed that the key topics of discussion within the team revolve around optimism development and the application of zero-knowledge proofs to safeguard user information; however, specifics remain unknown at press time. An official statement is currently awaited.

A few days prior, Ethereum Name Service joined hands with GoDaddy to integrate the ENS ecosystem with mainstream domain registration services, bringing the capabilities of Web3 to GoDaddy’s extensive user base. Both of the participating partners have released a dedicated section within their domain management interface to enable a seamless experience for their customers.

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Source: ens.eth

As reported by TronWeekly, users can leverage this innovative feature to simply link an Ethereum address with their domain names and get access to numerous applications across the Web3 landscape. The entire process is designed to be user-friendly, without the hassle of additional expenses or technical knowledge.

Meanwhile, the Dencun upgrade is known to introduce the highly awaited “proto-danksharding,” which introduces ephemeral data blobs. This innovative approach is expected to substantially reduce transaction fees on layer-2 rollup networks like Arbitrum, Base, and Polygon zkEVM.

Ethereum Dencun’s Game-Changing Upgrades in Focus

Moreover, Dencun is poised to introduce several significant enhancements, one of which is EIP-1153. This improvement introduces a “transient storage” system aimed at further reducing fees. Another noteworthy development is EIP-4788, designed to enhance transparency by storing the root of each beacon chain block in a smart contract, particularly benefiting bridges and staking pools.

Additionally, the integration of EIP-6780 aims to restrict the use of the self-destruct keyword. After the upgrade, this mechanism ensures that the keyword will not erase the code unless invoked within the same transaction as deployment. Consequently, all funds will be transferred to the deployer, even if invoked in a subsequent transaction.

Ethereum developers are slated to convene on February 8 for a meeting to finalize the mainnet deployment date in Dencun. Despite this, ETH bull Anthony Sassano indicated on February 7 that “all signs point to early-mid March.”

Shibarium Explodes Past 200M Transactions

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The Shiba Inu ecosystem has achieved a significant milestone with its Layer-2 (L2) scaling solution, Shibarium. Just a few hours ago, the network surpassed the 200 million transaction mark, indicating widespread adoption. Shiba Inu’s marketing lead, Lucie, confirmed the development on Twitter, and the number has since climbed to around 206.88 million, according to Shibariumscan.io data.

This comes just weeks after Shibarium successfully processed 100 million transactions. At the time, Shiba Inu’s lead developer, Shytoshi Kusama, described the achievement as a “moonstone” and not just a milestone. While Kusama has not yet commented on the latest feat, it is likely that he will use another catchy phrase to celebrate this new achievement.

Shibarium Gains Momentum

Shibarium’s journey hasn’t always been smooth. The network had a slow start, processing only a few thousand daily transactions in its early phase. As of November 23, it had only processed 4 million transactions despite launching on August 16.

However, the team behind Shibarium remained dedicated to improving the network and increasing its usage. Their efforts have paid off in December, with daily transactions consistently hovering between 5 million and 8 million. On-chain data shows that the L2 network has even recorded an impressive 7.85 million daily transactions, demonstrating its ability to handle large transaction volumes efficiently.

Furthermore, Shibarium has successfully minted over 2.34 million blocks and has an average block time of 5.0 seconds. The network also boasts over 14,500 cumulative contracts, including over 1,100 verified contracts.

The L2 blockchain’s rapid growth is a testament to the Shiba Inu community’s support and the increasing demand for efficient and affordable blockchain solutions. As the network continues to mature and attract more users, we can expect to see even more exciting developments in the future.

Shibarium’s future burns bright with a multitude of growth avenues. We can expect an explosion of exciting decentralized applications (dApps) taking root on its fertile soil, fostering a vibrant ecosystem. Bridges to other blockchains and ecosystems will sprout, weaving the L2 network’s into the wider tapestry of the cryptoverse. And to keep things fresh, the network’s own roots will delve deeper, with new features and functionalities blossoming, ensuring the network’s continued evolution and relevance. With such fertile ground, the netowrk’s future is sure to be bountiful.

Overall, Shibarium’s 200 million transaction milestone is a significant achievement that paves the way for continued growth and success for the Shiba Inu ecosystem. With its dedicated team, strong community support, and promising future developments, Shibarium is well-positioned to become a major player in the blockchain space.

Ethereum’s L-2 Battle Heats Up With Kraken’s Entry

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The Ethereum Layer-2 landscape is witnessing heightened competition as Kraken, one of the leading cryptocurrency exchanges, steps into the arena, aiming to rival Coinbase by launching its own Layer-2 network. Recent reports indicate that Kraken is in discussions with prominent Layer-2 pioneers such as Polygon, Matter Labs, and the Nil Foundation to explore collaboration opportunities and potentially leverage their technology as the foundation for its new network.

Despite the significant implications of this potential move, the discussions have not been publicly disclosed, and the details remain sparse. While Kraken representatives acknowledged their involvement, they refrained from sharing specific information about the initiative. They emphasized that the objective is to identify and address emerging challenges and opportunities within the industry without naming any specific parties involved in the talks.

Kraken, the second-largest trading platform in the crypto sphere, has recently taken strides to expand its influence and adaptability in the blockchain space. This initiative to develop its native Layer-2 network showcases Kraken’s resilience and determination, even in the face of past challenges such as legal battles and settlements, including a substantial $30 million settlement with the SEC.

Simultaneously, the adoption of Ethereum Layer-2 solutions is on the rise. Data from Token Terminal indicates a significant increase in average active addresses over the past three months, exceeding 10 million, nearly doubling from early 2023.

Ethereum L-2 Surge

Analyzing the chart below, it becomes evident that Polygon, an Ethereum sidechain, holds the top position in terms of popularity among Layer-2 solutions. Additionally, other Layer-2 networks utilizing roll-up technology, such as Arbitrum and OP Mainnet, are gaining traction among users.

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Ethereum's L-2 Battle Heats Up With Kraken's Entry 5

However, the market share of OP Mainnet has been gradually decreasing over time. Notable solutions like Base, supported by Coinbase, and StarkNet are also making strides, expanding their share of the market in the past three months.

In the cryptocurrency realm, active addresses represent the number of unique wallet addresses that have engaged with the blockchain by sending or receiving transactions within a specific timeframe. The fluctuation in active addresses serves as a valuable metric to gauge market sentiment and user adoption levels, especially during bear markets when activity trends can provide insights into market dynamics.

Ethereum: Vitalik Buterin’s Solutions for L2 Ecosystem

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In a recent discourse on the challenges plaguing Ethereum’s Proof of Stake [POS] system, co-founder Vitalik Buterin highlighted the critical issues surrounding staking centralization and transaction processing efficiency faced by Ethereum’s Layer 2 solutions1. Buterin’s insights shed light on the hurdles that Ethereum’s L2 ecosystem must overcome, emphasizing the pressing need for improved interoperability between Ethereum’s Layer 1 and Layer 2 solutions.

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Image Credit: Wu Blockchain

One of the primary concerns highlighted by Buterin revolves around cross-layer interactions. Ethereum’s increasing adoption of Layer 2 solutions necessitates a seamless method for users to manage assets across multiple L1s and L2s without being burdened by an excessive number of transactions. To address this, Buterin proposed a novel solution: the implementation of an innovative architecture called asset/keystore separation.

Under this proposed model, users would maintain a keystore contract that houses their verification key and the rules for its modification. Wallet contracts on both L1 and various L2s would read cross-chain to fetch the verification key, ensuring secure and efficient transactions. The Ethereum founder outlined two potential implementations of this system: a “light version,” where wallets store the verification key locally and update it with cross-chain proofs, and a “heavy version,” requiring cross-chain proof for each transaction, thus reducing keystore update costs but increasing per-transaction expenses.

Crucially, Buterin identified five types of proof schemes, including Merkle proofs and Verkle proofs, each offering unique pros and cons. However, he stressed the need for highly optimized cross-chain proofs to facilitate smoother transactions and reduce overall costs.

Ethereum: Enhancing Cross-Chain Interactions

Looking toward the future, Buterin emphasized the significance of aggregating proofs through bundling operations submitted by users, which could drastically reduce expenses. Additionally, Layer 2 solutions must minimize latency when reading the Layer 1 state. To achieve this, wallets can be deployed on systems with lower ETH connections, such as Layer 3s or separate chains. However, the Keystore should be maintained either on Layer 1 or on high-security zero-knowledge rollup Layer 2 to ensure robust security measures.

According to Buterin, Ethereum is inching closer to enhancing cross-chain interactions, implementing asset/keystore separation, and placing a heightened focus on privacy. These developments mark significant strides in Ethereum’s ongoing journey toward creating a more efficient, secure, and decentralized blockchain ecosystem.

Ethereum L2 Captures Investors’ Attention With Surge In Transactions

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Ethereum layer 2 network Optimism has caught investors’ attention with a steady upswing in terms of its Transactional activity, in the past weeks, data from etherscan depicted.

Not only that, it has even managed to flip its nearest competitor Arbitrium whose value has been reduced to half since its all-time high in Nov.

Nevertheless, the growth in the layer 2 network is positive news for investors, buyers of the tokens as well as the users of decentralized applications [dApps] built on that network,

The Optimism ecosystem is also becoming more and more appealing to cryptocurrency traders as a potential location to earn profits similar to the 100-times-plus multiples occasionally seen in previous bull-market cycles.

The Ethereum-based scaling product is one of a slew of blockchain networks that have launched in the last year, each promising to be faster and more affordable than the one before it. It allows traders to transact on the blockchain network for under a few cents in fees and transacting times of a few seconds..

According to on-chain data, in a single day last week, the ecosystem recorded more than 800,000 transactions, which was more than 10 times as many as in June of last year and nearly twice as much as network activity in November.

Earlier TronWeekly reported that the Ethereum layer-2 networks Arbitrum and Optimism have registered an increase in transaction volume in the span of just three months, exceeding even that of the mainnet Ethereum.

Ethereum L2s Surpass Ethereum In Transaction Volume

Data from Dune Analytics showed that Arbitrum and Optimism combined processed over 1.12 million transactions while Ethereum processed over 1.06 million transactions on Jan. 10.

On the other hand, since late October, transactions on the Ethereum network have reduced by roughly 33%, according to Etherscan.

With regards to the l2s, Optimism [OP] for one, has entered the year on an optimistic note as it enjoys a bull run. But, has suffered stagnancy in terms of total value locked [TVL].

In comparison to that, Arbitrum has reportedly outpaced the other top Layer 2 blockchains, such as Optimism and Polygon, when it comes to TVL. The former, however, is unaffected as it continues to increase in tempo and rule the L2 region.

Nonetheless, L2 transactions boost Ethereum’s appeal when they are included in the mix.