Key Takeaways
- Layer 2 networks are spending extra gasoline than ever settling transactions on Ethereum mainnet.
- The Wednesday following Optimism’s token launch noticed Layer 2 networks use a record-breaking 3.95% of the every day gasoline consumption on Ethereum.
- Polygon’s co-founder Sandeep Nailwal urged on Twitter at present that Ethereum would possibly ultimately evolve right into a community the place Layer 2 transactions occupy the vast majority of its blockspace.
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With Layer 2 networks gaining important traction in consumer exercise, the gasoline charges Ethereum is raking in for renting its safety are breaking report highs.
Ethereum Income From Layer 2 Growth
Layer 2 networks are spending report quantities of gasoline on Ethereum mainnet.
In response to on-chain information from Dune, Layer 2 networks are actually spending extra gasoline than ever to settle or show transaction batches on Ethereum’s mainnet, with spending constantly surpassing 10 billion gasoline because the starting on Could.
As an example, the very best quantity of gasoline ever used on the Ethereum mainnet to settle Layer 2 community transactions occurred this Wednesday—instantly after Optimism launched its OP governance token late Tuesday. Particularly, all Layer 2 networks mixed spent round 3.95 billion of the overall 100 billion every day gasoline restrict on Ethereum, accounting for about 3.95% of the gasoline spent on the community that day. To place the expansion price into perspective, the overall month-to-month gasoline spent by Layer 2 networks on Ethereum in Could 2021 was round 5 billion, whereas in Could this 12 months, it was roughly 52 billion, marking over a tenfold enhance in absolute gasoline utilization phrases.
When Ethereum visitors will increase it accrues worth to all ETH holders. It is because the bottom gasoline charges on Ethereum are burned, decreasing the general ETH provide and thus growing the worth of all remaining tokens. On this means Ethereum “income” as Layer 2 networks use its blockspace to settle transactions extra effectively than will be achieved instantly on mainnet.
Layer 2 is an umbrella time period for blockchain scaling options that deal with transactions on separate networks then ship them again to Ethereum mainnet for settlement. For instance, Optimism and Aribrum are Layer 2 networks primarily based on a cryptographic expertise often known as Optimistic Rollups that bundle transactions collectively off-chain (on their separate networks) after which settle the bundles in a single transaction on the Ethereum mainnet to scale back its transaction load.
In contrast to so-called sidechains like Polygon’s Matic blockchain, which have their very own consensus mechanisms, Layer 2 networks take the transactional load off of Ethereum however borrow or inherit its safety by finally settling their batches on mainnet. This results in an attention-grabbing dynamic the place Layer 2 transactions turn out to be more and more cheaper for customers, however mainnet transactions stay sufficiently costly to pay for Ethereum’s appreciable safety expenditure.
Commenting on the surge in Layer 2 utilization on Twitter at present, Polygon co-founder Sandeep Nailwal speculated that over time, Ethereum would possibly evolve from a user-focused to a network-focused chain the place it primarily settles batched Layer 2 community transactions as a substitute of particular person, user-generated mainnet transactions. “As I additionally mentioned earlier than that #Ethereum is transitioning from a B2C(consumer to chain) enterprise mannequin to B2B(chain to chain) mannequin,” he said, including that ultimately, “majority of the Eth’s gasoline could be utilized by L2 chains.”
Disclosure: On the time of writing, the writer of this piece owned ETH and several other different cryptocurrencies.
