Ethereum (ETH) Layer 2 Networks Surpass $1 Billion in TVL

Slowly but surely, Layer 2 scaling techniques are becoming platforms of choice for a variety of dApps. In early Q4, 2021, L2 adoption of Ethereum (ETH) accomplished its massive milestone.

Ethereum's L2s smashed $1 billion threshold

According to data shared by L2Beat, the net value of various assets locked in the liquidity mechanisms of protocols that are using second-layer solutions for Ethereum (ETH) scalability surpasses $1 billion for the first time in history.

This indicator added 12.6% in the last seven days; it is more than double last month. In mid-August, it surpassed the previous highs registered amidst May's Ethereum (ETH) rally.

DeFi veterans dYdX and Optimism are responsible for almost 50% of this monstrous value. Early-stage solution Nahmii contributed to 16% of this indicator, yet its liquidity is allocated in the protocol's own tokens.

The protocols listed by L2Beat are developing products in the sphere of exchanges, payment solutions, multi-purpose liquidity aggregators, NFT marketplaces and DAOs.

ZK-rollups lead the way

The protocols adhere to various models of Ethereum scalability. Almost half of them utilize zero-knowledge rollups (ZK-rollups). This technology allows users to rollup data from multiple transactions into a single batch and reduce the costs of on-chain computations.

Optimistic Rollups is another popular technology, while some protocols are using the Plasma, Validium and State Pools designs.

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