The Increasing Lockup on Ethereum Layer2: An Overview of the Current State

According to reports, L2BEAT data shows that as of January 16th, the total lockup on Ethereum Layer2 was $10.47 billion. Among them, the largest lockdown volume is the expansion plan, Arbitrum, which is approximately 6.98 billion US dollars, accounting for 66.71%; Next is Optimism, with a lockdown of 2.15 billion US dollars, accounting for 20.56%; The third is dYdX, with a lock-in volume of 370 million US dollars, accounting for 3.54%. The fourth is zkSyncEra, with a lock-in volume of 240 million US dollars, accounting for 2.29%

The total lockdown volume of Ethereum L2 network is 10.47 billion US dollars

As of January 16th, 2022, reports show that the total lockup on Ethereum Layer2 is $10.47 billion, with the majority of funds being locked up in the expansion plan, Arbitrum, accounting for 66.71% of the total lockup. In the following article, we’ll take a closer look at the current state of Ethereum Layer2, exploring the various platforms and their lockup amounts to gain a better understanding of the growing interest in this technology.

Understanding Ethereum Layer2

Ethereum Layer2 is a technology built on top of the Ethereum blockchain that allows for faster and cheaper transactions while avoiding congestion on the network. The technology is built on smart contracts and is used by developers to build decentralized applications (DApps) that can be used for various purposes.

The Top Platforms and their Lockup Amounts

1. Arbitrum

Arbitrum is currently the largest platform on Ethereum Layer2, with a lockup of approximately $6.98 billion, accounting for 66.71% of the total lockup. The platform provides fast and low-cost transactions, making it a popular choice for DApps.

2. Optimism

Optimism is the second-largest platform, with a lockup of $2.15 billion, accounting for 20.56% of the total lockup. The platform provides fast and secure transactions, with a focus on DeFi applications.

3. dYdX

The third-largest platform is dYdX, with a lockup volume of $370 million, accounting for 3.54% of the total lockup. The platform is a decentralized exchange that offers margin trading and lending services for cryptocurrencies.

4. zkSyncEra

Finally, zkSyncEra is the fourth-largest platform on Ethereum Layer2, with a lockup volume of $240 million, accounting for 2.29% of the total lockup. The platform focuses on providing fast and cheap transactions with privacy and security using zero-knowledge proofs.

Factors Behind the Increase in Lockup on Ethereum Layer2

There are several factors behind the increase in interest and lockup on Ethereum Layer2. One of the main reasons is that it is a solution to the current scalability problems faced by Ethereum. As the number of DApps and users on Ethereum grows, the network’s congestion increases, resulting in higher fees and longer confirmation times for transactions. By using Layer2 technology, developers can create DApps that are faster and cheaper to use, making them more appealing to users.
Another reason is the increasing interest in DeFi applications. DeFi has been one of the fastest-growing sectors in the cryptocurrency industry, with many users seeking high-yield investments and decentralized financial services. Layer2 technology offers faster and cheaper transactions, making DeFi more accessible to a wider range of users.

Conclusion

As interest in Ethereum and DeFi continues to grow, it’s no surprise to see an increase in the lockup on Ethereum Layer2. Platforms like Arbitrum, Optimism, dYdX, and zkSyncEra offer fast, cheap, and secure transactions, making them a popular choice for DApps and users alike. While the technology is relatively new, its potential to solve scalability issues and unlock new possibilities for decentralized applications is immense.

FAQ’s

1. What is Ethereum Layer2?
Ethereum Layer2 is a technology built on top of the Ethereum blockchain that allows for faster and cheaper transactions while avoiding congestion on the network.
2. Which platform has the highest lockup on Ethereum Layer2?
Arbitrum currently has the highest lockup on Ethereum Layer2, with approximately $6.98 billion in funds locked up on the platform.
3. Why is there an increasing interest in Layer2 technology?
There is an increasing interest in Layer2 technology due to its potential to solve scalability issues and provide faster and cheaper transactions for decentralized applications, especially in the DeFi sector.