Comprehensive comparison of on-chain data Who is the future star of L2?

Extensive Analysis of On-Chain Data Who Will Emerge as the Promising Champion of the L2 Landscape?

Author: Biteye Core Contributor Louis Wang

*Full article is about 5000 words, estimated reading time is 10 minutes

This year can be said to be a big year for Layer2 (mainly referring to rollups), with nearly ten Layer2 mainnets already launched.

• March 24th, zkSync era goes live
• March 27th, Polygon zkevm goes live on mainnet Beta
• July 17th, Mantle announces the launch of the mainnet Alpha version
• July 18th, Linea goes live
• August, Base mainnet goes live
• September 12th, Manta launches its Layer2 mainnet LianGuaicific
• October 10th, Scroll mainnet goes live…

It is evident that Layer2 is rapidly developing, with both Op rollups and ZK rollups, which we thought were distant, emerging at an explosive speed. Just six months have passed since the Arb airdrop.

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The original vision of Layer2 technology was to address Ethereum’s scalability needs, increase transaction throughput, while relying on Ethereum to maintain decentralization and security, providing users with a better user experience, lower transaction fees compared to the mainnet, and smaller delays and congestions.

This article aims to use on-chain data comparison to allow readers to understand some patterns and appearances of the Layer2 competition.

Layer2 Overview

According to DeFiLlama data, the total locked value (TVL) of Layer2 rollups is approximately $3.4 billion, with Arbitrum in first place with a TVL of $2.06 billion, accounting for 60.62%, followed by Optimism, accounting for 21.41% market share.

Arbitrum and Optimism have the first-mover advantage in the Layer2 race and are the earliest mainnets to be launched, together capturing over 80% of the market share.

Base and zkSync era also have a TVL of over $100 million, while the TVL of other public chains is less than $100 million.

Considering the timeline, the diversity of the Layer2 market has noticeably increased starting this year. Using January as a benchmark, Arbitrum’s market share has consistently remained around 60% and has not been influenced by later arrivals, while Optimism’s share has dropped from 32% to 21%.

Author’s note: There is a significant difference in data between DeFiLlama and L2BeatsTVL. Taking Arbitrum as an example, L2Beats ($7.52 billion) is more than three times higher than DeFiLlama ($2.06 billion).

This is because the two platforms employ different statistical methods. L2Beats calculates cross-chain value, i.e., how much money has been transferred to the target chain via cross-chain bridges, whereas DeFiLlama calculates the total locked value of various dApps on the target chain.

Simply put, $5B is missing and has not been used in any dApps on Arbitrum (possibly hoarded in wallets), at least not in the dApps counted by DeFiLlama.

Arbitrum

(Source: https://defillama.com/chain/Arbitrum?users=false&txs=true&tvl=true)

Arbitrum currently has over 14.29M unique addresses, with a total of 418.45M transactions and TPS6.3.

The on-chain activity reached its peak during the airdrop in March, with over 3M transactions in a single day. After the airdrop, the on-chain activity remained at a good level and was not affected by the market downturn this year.

(Source: https://defillama.com/chain/Arbitrum?users=true)

Arbitrum has many well-known projects in its ecosystem, such as GMX, which accounts for 23% of TVL, and the native DEX+LaunchLianGuaid project Camelot, as well as the chain gaming project TreasureDAO.

In addition to the projects migrated from the mainnet, the DeFi ecosystem is complete and innovative, with a high level of overall ecosystem richness. Therefore, user retention is good, with nearly 3/4 of daily active users being returning customers.

Optimism

(Source: https://defillama.com/chain/Optimism?txs=true)

Optimism has 57.66M unique addresses and 177M transactions, with TPS4.6. After the airdrop in June last year, OP’s activity has maintained a good growth momentum.

The native flagship project Velodrome currently has a TVL of $145M, and most of the remaining TVL is supported by Synthetix and its ecosystem projects such as Lyra and Thales.

(Source: https://www.theblockbeats.info/news/44039)

After OP upgraded to bedrock and released the modular blockchain solution OP Stack, it clearly paved its own path.

OP Stack allows developers to customize their own Layer2 networks by choosing and assembling execution layers, DA layers, etc., based on their own scenarios and needs, reducing the difficulty of launching chains.

The adopters include Coinbase’s Base, BitDAO’s Mantle, BN’s opBNB, Zora focusing on NFTs, and more. And the chains using OP Stack will, to some extent, contribute back to OP, for example, Base will give a portion of its revenue to the OP Treasury.

OP bound the project teams using OP Stack to achieve a win-win effect with its grand vision of a super-chain.

Base

(Source: https://defillama.com/chain/Base?txs=true)

As mentioned earlier, Base’s Coinbase is based on OP Stack’s Layer2, currently with 2.4M users, 67M transactions, and TPS3.8.

Its focus mainly comes from the phenomenon-level dApp, FriendTech. In the past 30 days, FriendTech generated protocol fees of $5.4M, while Base generated revenue of approximately $1.32M during the same period.

During the peak of enthusiasm for SocialFi, FriendTech’s protocol revenue was second only to Ethereum and Lido.

In addition to FriendTech, the native project that Base can compete with is Aerodrome, a fork of Velodrome on OP, currently with a TVL of $55.53M, ranking first.

Mantle

(Source: https://explorer.mantle.xyz/)

Mantle is a Layer 2 based on Optimism OVM architecture and uses modular design. It significantly reduces the cost of rollup by using EigenDA as a data availability layer.

Currently, Mantle has over 820,000 addresses and has conducted 21M transactions.

(Source: https://defillama.com/chain/Mantle)

Among the leading projects in Mantle’s TVL, there are many native DEXs, such as Agni and FusionX. Mantle has strong financial support.

Mantle Treasury has a reserve value of over $2 billion, including over 220,000 ETH. It has the advantage of deposit scale and liquidity, laying a solid foundation for its future LSD track projects.

zkSync Era

(Source: https://dune.com/matter_labs/zksync-era-overview)

zkSync is a leading player in the zk series, developed by the MatterLabs team.

Version 1.0 Lite only supports token payment scenarios, while version 2.0 era is an EVM-compatible general mainnet, with over 4.67M independent addresses.

zkSync originally used zkSNARK algorithms but announced the launch of a new proof system, Boojum, on July 17, transitioning from zkSNARK to zkSTARK proof algorithms.

(Source: https://dune.com/matter_labs/zksync-era-overview)

The launch of the zkSync Era followed closely after the Arb airdrop, so users have great enthusiasm and expectations for zkSync. In just over half a year, it has accumulated 4.6 million unique addresses and 165 million transactions. zkSync has built-in native account abstraction, eliminating the need for the ERC4337 solution.

There are very few cases of leading projects migrating to zkSync, such as Uniswap, AAVE, giving native projects and some new projects more opportunities, such as SyncSwap, Mute, Maverick, etc., the current applications are mainly focused on DeFi.

(Source: https://defillama.com/chain/zkSync%20Era)

Scroll

(Source: https://blockscout.scroll.io/)

Scroll, the pride of the Chinese, announced the launch of its mainnet on October 10. In just a few weeks, the TVL reached $17 million, with over 2 million addresses completing 4.7 million transactions.

Even before the mainnet announcement, Twitter was flooded with hints of Scroll, with many project teams and KOLs joining in the marketing frenzy, creating an atmosphere of great anticipation.

Within a week, Layer0 announced support for Scroll’s mainnet, Orbiter supported cross-chain USDT and USDC on Scroll, OKX Wallet integrated Scroll, and NFTScan supported Scroll’s mainnet. The widespread support demonstrated Scroll’s influence.

During the testnet phase, Scroll deployed over 100 projects for testing, covering various fields.

Currently, there are over 30 projects deployed on the mainnet. The situation is similar to zkSync, with roughly an equal distribution between multi-chain deployed projects and native projects.

(Source:https://scroll.io/ecosystem)

Starknet

(Source:https://defillama.com/chain/Starknet)

Starknet is a general-purpose public chain that adopts zk-Stark proof method and runs on Cairo-VM, rather than the EVM compatibility pursued by most Layer 2 solutions.

There is no concept of an EOA on Starknet, all accounts are native AA accounts, and currently over 2.9 million accounts have been deployed.

The contract language used on Starknet is Cairo, not the more familiar Solidity, which presents significant technical obstacles for project migration.

Starknet has recently restarted its mainnet with the major update of Cairo 1.0, officially starting its operations. TVL steadily rose to over $40 million, but experienced a rapid decline after the Israeli-Palestinian conflict (StarWare headquarters are located in Israel), and is currently stable at $30 million.

The projects with high TVL on Starknet are mostly older projects that were deployed during the Beta mainnet period, such as JediSwap, mySwap, and others.

One notable project is Ekubo, ranking fifth in TVL, but occupying 75% of the total trading volume on Starknet. Recently, UniSwap DAO proposed to provide approximately $12 million worth of 3 million Uni tokens to support Ekubo’s development in exchange for a 20% token share of Ekubo.

(Source: https://defillama.com/chain/Starknet)

Manta LianGuaicific

(Source: https://defillama.com/chain/Manta)

Manta LianGuaicific is a zk general-purpose Layer2 solution launched by Manta, which will use Celestia as the data availability layer to significantly reduce user interaction costs.

Since its launch in September this year, TVL has reached $18.59 million within two months, with 166k independent addresses and 2.16 million completed transactions.

Manta initially considered adopting the OP Stack solution but later migrated to Polygon CDK, becoming part of the Polygon ecosystem.

Manta’s NPO website has minted over 300,000 zkSBT tokens, with over 200,000 wallet installations.

(Source: https://defillama.com/chain/Manta)

Aperture Finance is a leading liquidity management platform in the industry, featuring an “Intent-based” architecture that enables users to automate their strategies comprehensively.

Its project, ApertureSwap, is the native DEX on Manta, allowing users to provide centralized liquidity, currently ranking second with a TVL of $4.95 million.

Linea

Linea is a zkevm Layer2 solution launched by ConsenSys, the parent company of the MetaMask wallet.

As one of the most important infrastructures in the blockchain industry, MetaMask has 30 million active users per month, all of whom can be potential users of Linea. Combined with the strong background of the founding team and investors, as well as a valuation of $7 billion, Linea has become a hot Layer2 solution.

Less than half a year since its launch, it has accumulated 1.68M independent addresses and generated 18.36M transactions.

(Source:https://defillama.com/chain/Linea?volume=true&tvl=true)

Linea’s TVL has now exceeded $27M, and both SycnSwap and Velocore, ranked first and fourth, are native DEX on zkSync, migrating to Linea.

(Source: https://defillama.com/chain/Linea?volume=true&tvl=true)

Comprehensive Comparison

The basic data of each Layer2 can be summarized as follows:

To see the data and changing proportions of the cross-chain from Ethereum mainnet to various Layer2, you can refer to Chaineye’s data board for easy comparison and viewing:

(Source:https://chaineye.tools/)

Summary

It used to be said that “fat protocol, thin application,” which means that most of the value of blockchain is captured at the protocol layer, with only a small portion distributed at the application layer. Public chains capture most of the profits by selling block space.

However, as the infrastructure continues to improve, various Layer2 public chains continue to emerge, suddenly feeling redundant and insufficient in terms of applications.

In a bearish market environment, liquidity itself is limited, and this liquidity is also fragmented among various Layer2 in the arms race.

Every chain is hoping to incubate native innovative applications, but often there are few moments of enlightenment, and most of the time it is a multi-chain fork of a successful project.

The emergence of FriendTech has brought a lot of attention, funds, and users to the Base chain, and TVL has skyrocketed along with the popularity of FT.

Base has stated that it will not issue its own tokens, which can be understood as a low proportion of on-chain users interacting for the Base airdrop. Users and funds are largely attracted by FT as a phenomenal application. The contribution and impact of a killer app on a public chain is evident.

When users profit from these types of dApps, the profits are likely to spill over into other projects in the ecosystem, benefiting the entire public chain.

Meanwhile, the protocol revenue of FT is much higher than that of Base public chain, even peaking at more than 5 times the difference. Therefore, besides bringing a wave of SocialFi frenzy, the emergence of FT also makes us wonder if good consumer applications have become scarce due to the maturity of infrastructure.

In the future, applications will no longer need to revolve around well-funded public chains, just like the explosion of DeFi on Ethereum was due to the accumulation of a large amount of funds.

Mature Layer2 and accompanying cross-chain infrastructure are already able to meet the demand for smooth fund migration and able to chase after good applications. In the future, we may gradually move from “lean applications” to “bloated applications”.

(Source: https://defillama.com/protocol/friend.tech?fees=true&tvl=false)

That’s why after FT became popular, every public chain is attempting to support their own SocialFi projects, such as Linea’s TOMO, Avalanche’s SA, and so on. Whether these projects will ultimately succeed or not, we can clearly see from the attitude of public chains that they are craving for native star projects.

(Source:https://defillama.com/chain/Base)

For Layer2, the need to capture users, retain users, and keep funds active cannot rely on airdrop PUAs.

Take the two most mature Layer2 chains, Optimism and Arbitrum, as an example. After the airdrops ended, the on-chain user activity and transaction volume did not decline, but instead became stronger. They have their own native star projects, such as GMX on Arb and Velo on OP.

Both chains also continue to launch incentive programs, such as Arb’s short-term incentive project STIP and OP’s successive retrospective incentives.

Keeping a public chain’s long-lasting vitality is a very challenging and complex task, requiring efforts from the project team and more participation from developers and funds.

From a higher strategic perspective, what truly drives a Layer2 chain to stand out is the narrative aspect.

For example, the narrative of the “Super Chain” promoted by OP, the open-source modular solution OP Stack, attempts to shine brighter in the Ethereum Layer2 composition than Cosmos, garnering numerous supporters;

Similarly, Polygon also launched the Chain Development Kit (CDK), a zk modular blockchain solution, with adopters including Polygon zkEVM, Manta, Canto, and others;

Arbitrum announced the launch tool for Layer3 blockchain Arbitrum Orbit, and zkSync followed suit with the release of the open-source toolkit ZK Stack, also expressing support for Layer3 construction;

Starknet actively promotes full-chain games; Zora specializes in NFT and commission-based economy…

Every chain is pushing new narratives from various perspectives, as with the implementation of Layer2, it’s difficult to hype up Layer2 as a narrative itself.

In summary, competition between Layer2 solutions is always good for users. By enjoying the security of the Ethereum network, they can also benefit from low transaction fees. Only when all the infrastructure is matured can it bring possibilities for mass adoption. Let’s look forward to the future of Layer2 together!

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