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The analysis shows a 560% value increase from the early periods of September when it first reported a $1billion locked value milestone. Layer 2 Ethereum transactions are facilitated by different types of computational protocols known as roll-ups. These roll-ups finalize transactions off the main Ethereum Layer one network and post their output as layer one transaction output, thereby circumventing the terrible gas fee hike that comes with a plethora of interactions on the network.
Up by the numbers
A cursory look at L2beat rollup rankings shows Arbitrum — the multi-purpose optimistic rollup — as the leader of the pack with close to 50% of the market share. Arbitrum at 47.2% is the only rollup with a multibillion TVL of $2.67 billion. Part of its recent growth has been attributed to its latest integration with Binance to make the deposit and transfer of ERC-20 tokens easier and faster for users on its platform.
dYdX — the topmost ZK rollup — trails from far behind at the second spot, with a TVL of $975 million representing a total market share of 17.27%. Loopring, Boba Network, and Optimism complete the top five spots with a TVL of $580 million, $574 million, and $461 million respectively. They now have a combined market share of approximately 29%, and specialize in layer two transactions that bother on payments, exchange, and universal transactions.
Ethereum Layer 2 challenges
Despite its shining achievement as an ease to the hectic and exorbitant nature of Layer one, Layer two still lacks a great deal in the aspects of bridging the cross-platform integration gap. There are still visible difficulties in undertaking a transaction between two L2 chains — say Arbitrum and dYdX — hosted on the same layer two as one would have to move their entire DeFi holdings to a new chain to enable proper execution.
 
 
Users hope to see many more cross-chain interaction upgrades in the coming weeks especially since it is expected that a major upgrade to Ethereum L2 will take place in the year 2022.
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