All articles tagged with #layer 2
JPMorgan estimates Coinbase's upcoming Base network token could be valued up to $34 billion, viewing it as a significant new monetization avenue alongside USDC yields and onchain trading, with potential to enhance Coinbase's valuation and decentralization efforts.
In May, Layer-2 solutions saw significant growth, with Arbitrum (ARB) and Optimism (OP) leading in network growth. ARB's price increased by 8%, while OP's price fell by over 10%. Despite ARB's positive price action, both tokens experienced negative market sentiment. Blast and opBNB also showed notable performance in terms of transaction growth and network usage.
Layer-2 projects on the Ethereum blockchain, such as Polygon, have seen a surge in on-chain activity, with 32 million transactions weekly since the Dencun upgrade, including Base, Arbitrum, and Optimism. The increase in meme coin activity on Base, particularly with the coin BRETT, has contributed to the network's dominance. While transaction numbers are high, active addresses have decreased, indicating fewer market participants involved in higher transactions. The market cap and prices of meme coins like BRETT and TOSHI suggest potential for further growth, which could lead to increased L2 transactions on Ethereum in the future.
Arbitrum, a popular layer-2 solution, has seen a significant increase in unique addresses, positioning it as a potential challenger to Ethereum. However, its total value locked (TVL) has declined, indicating that it may not yet outperform Ethereum. Despite this, ARB's network activity remains high, with a surge in its token price by over 4% in the last 24 hours, reaching $1.47 with a market capitalization of over $3.9 billion.
Ethereum's Dencun upgrade, a combination of the "Cancun" and "Deneb" upgrades, aims to reduce gas fees for Layer 2 networks by implementing EIP-4844, which improves the blockchain's data handling. This upgrade will significantly lower gas fees for transactions on decentralized exchanges, potentially dropping costs to as low as a fraction of a cent. While the main Ethereum network won't see fee reductions until 2026–2027, experts believe the upgrade will have a positive impact on Ether's price, potentially leading to a surge in mainstream applications and development potential.
Layer 2 cryptocurrencies experienced mixed performance as Ethereum's Dencun upgrade went live, with tokens of Polygon, Arbitrum, and Starknet leading gains while Immutable X and Celo declined. The upgrade is expected to reduce transaction costs on layer-2 protocols and attract more applications, but there are concerns about a potential correction in the crypto markets as anticipation for the upgrade wanes and the probability of a spot ether ETF being approved in the U.S. diminishes.
Ethereum layer-2 scaling network Blast experiences block production halt following Ethereum's Dencun upgrade, but the issue is resolved within an hour. Despite the setback, Blast has seen an increase in total value locked (TVL) to over $2.9 billion as users capitalize on DeFi protocols and potential token airdrops. The Dencun upgrade aims to reduce costs for layer-2 network usage by allowing temporary storage of information.