The latest market analysis confirmed that the total value locked (TVL) on Ethereum layer two (L2) has exponentially surged to a new all-time high of $5.64 billion.
Data acquired from L2beat, a Layer 2 analytics platform, confirmed that the total amount of value locked across various L2 protocols and networks reached an all-time high recently.
By design, Ethereum layer two scaling solutions provide relatively much higher processing speed and lower transaction fees. In that context, these L2 protocols have recorded massive adoption in November, attracting the highest average gas fee in the history of the Ethereum network.
Hitting new ATHs in $ETH locked in layer2
— Evan Van Ness 🐬 (@evan_van_ness) November 22, 2021
Among the best performing protocol was the Abitrum scaling solution, with the lion’s share of $2.67 billion locked up into the L2 market, representing 45% of the total.
The dYdX, a decentralized derivatives exchange, slightly distanced at second place with $975 million in TVL, while the Loopring L2 DEX came in third place with $580 million.
Remarkably, the Layer 2 TVL has surged more than twice since the beginning of October, exploding 110% from $2.68 billion to the current $5.64 billion.
According to Bitinfocharts, average transaction fees have also experienced an upside trajectory this month. On November 9, Ether transaction fees spiked to their second-highest ever level of $65, surging more than 700% over the past four months. Ether transaction fees currently stand at $40.
On the other hand, Ether gas prices vary depending on the specific operation. According to Etherscan, a simple ERC-20 token transfer can cost roughly $45, while a more complex smart contract interaction or Uniswap swap roughly costs a painful $140.
In another unfortunate Ether scenario, registering a name on the Ethereum Name Service (ENS) can cost hundreds of dollars in gas fees despite the actual name costing just a few dollars per year.
Since October this year, many multichain compatible DeFi protocols have seen heavy inflows as investors and developers attempted to avoid the Ethereum network due to soaring gas fees.