Flipside Crypto, a blockchain data and analytics platform, believes this year will be crucial for the growth of Layer 2 solutions secured by the Ethereum network.
In the report titled "The OnChain Crypto User Report"Crypto analytics platform Flipside Crypto examined the potential growth that layer 2 solutions could experience in the Ethereum ecosystem, once the next cryptocurrency bull run begins.
The platform noted that the rise and demand for crypto assets will drive the growing adoption of these scalability-focused solutions, which offer faster transactions and lower commission fees than L1s.
Flipside Crypto also believes that new blockchains will be developed this year, at a higher rate than seen in 2023, which will toughen competition between L2s of the crypto ecosystem. The emergence of new blockchain solutions will put pressure on existing chains to improve the capabilities and functionalities they offer to users, as well as to optimize the user experience and reduce transaction costs for end users, he said.
L2, profitable alternatives in the crypto industry
Layer 2 solutions in Ethereum are those that are developed with the aim of scaling the main network, to allow users to make transactions more quickly and accessibly, enjoying the same security they get in Ethereum.
Flipside Crypto believes that the less expensive access these solutions offer to users interested in the innovative Ethereum ecosystem and EVM (Ethereum Virtual Machine)-compatible chains will usher in a new period of adoption, as accessibility, speed, and low fees become more of a necessity.
Polygon's new user base nearly matches Ethereum's
Polygon Network is one of the leading layer 2 solutions in the Ethereum blockchain ecosystem, and according to Flipside Crypto data, one of the most widely used. The crypto analytics platform says that Polygon’s new user base grew exponentially in 2023, to the point that it almost equals the new user base recorded by the Ethereum mainnet in the same year.
In 2023, 15.240.523 new users joined Polygon Network, while Ethereum recorded a total of 15.408.536 new users. This is only 1,09% higher than the total number of users acquired by Polygon Network last year.
Source: Flipside Crypto
Investment in NFT projects
The potential that L2s offer to increase mainnet scalability without compromising security has captured the attention of NFT traders and collectors, who have chosen to prioritize the purchase of these non-fungible tokens on L2s rather than other blockchains.
According to the platform's report, the L2 users bought more NFTs than they soldThis may be related to the low gas fees that these networks allow for the acquisition and trading of digital assets.
Flipside Crypto stressed that anyone who remembers the gas fee wars at the height of the NFT hype in 2021 will know how important L2s are for the healthy growth of the Web3 ecosystem.
Continue reading: Web3 games dominate the blockchain industry landscape
