Ethereum Layer 2 ecosystems such as Arbitrum, Optimism, Polygon, and Metis are experiencing promising growth with various catalysts in 2023, including upcoming protocol launches, incentives programs, and upgrades.
L2 Future Bright on Ethereum
The L2 narrative continues to hold strong in the opening of the new year with several significant players emerging on Ethereum.
Ethereum’s ecosystem has enjoyed an impressive start to the year with the likes of Arbitrum contuing to make important progress, ZKSync opening to builders to deploy their protocols, and Polygon zkEVM Mainnet Beta set for launch on March 27.
Arbitrum, the Ethereum Layer 2 (L2) ecosystem, has seen impressive growth in daily transactions, total value locked (TVL), and active addresses in the last six months. The ecosystem’s growth has been organic, with no confirmed airdrops or token incentives that can only work in the short-medium term.
With many DeFi primitives yet to launch on Arbitrum, this growth is expected to continue despite market conditions. Additionally, Arbitrum will soon become the first Ethereum L2 to support multiple programming languages with the launch of Stylus, a programming environment upgrade in 2023.
Optimism, another Ethereum L2 ecosystem, recently partnered with Coinbase to build its standalone Ethereum L2 and work together on improving the OP Stack powering the Optimism chain.
With the upcoming Bedrock Upgrade that will make Optimism the cheapest L2, its growth in 2023 is expected to be exponential. Synthetix, the largest protocol built on Optimism, also released Synthetix V3 less than two weeks ago, which is expected to accelerate the pace at which the L2 ecosystem is growing.
Other L2 ecosystems to watch include Polygon zkEVM, zkSync, and Metis. Polygon and zkSync have raised over $1 billion in funding, and once their mainnets are fully launched, they are expected to announce significant incentive programs that will contribute massively to the growth of L2s dominance. Metis is also expected to release a similar incentive program once AAVE V3 is live on the network, which could lead to significant growth in TVL and daily active users.
The future of Ethereum L2 ecosystems looks promising, and with many bullish catalysts and strong VC backing, we may see more than two Ethereum L2s in the top 10 chains by TVL by the end of this year.
What is Ethereum:
Ethereum is an open-source, distributed computing platform based on blockchain technology that can execute smart contracts – that is, the terms written in the contract will be executed transparently, automatically when the previous conditions are satisfied, and no one can interfere. At the same time, Ethereum also allows developers to build decentralized applications (DApps) and decentralized autonomous organizations (DAO).
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Source : bsc.news
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