The total value locked (TVL) on Ethereum layer two (L2) networks has surged to a new peak as gas fees continue to steadily rise driving further adoption.
Layer 2 analytics platform L2beat currently reports that the total amount of value locked across various L2 protocols and networks has reached an all-time high of $5.64 billion.
L2 scaling solutions provide much higher transaction throughput and lower transaction fees, and they have surged in terms of adoption in November which has seen the highest average gas fees in Ethereum network history.
Hitting new ATHs in $ETH locked in layer2
— Evan Van Ness (@evan_van_ness) November 22, 2021
Arbitrum has the lion’s share of the L2 market with $2.67 billion locked up, or around 45% of the total.
The dYdX decentralized derivatives exchange is in second place with $975 million in TVL, and the Loopring L2 DEX is in third place with $580 million, however its own LRC token makes up most of its value locked.
Layer 2 TVL has more than doubled since the beginning of October, surging 110% from $2.68 billion to current levels.
Average Ethereum transaction fees are currently around $40 according to Bitinfocharts. They spiked to their second highest ever level of around $65 on Nov. 9 and have increased by 700% over the past four months.
Gas prices vary depending on the operation, a simple ERC-20 token transfer can cost around $45 at the moment and a more complex smart contract interaction or Uniswap swap can cost a painful $140 according to Etherscan.
Registering a name on the Ethereum Name Service can cost hundreds of dollars in gas despite the actual domain name costing just a few bucks per year.
Since October, multichain compatible DeFi platforms have seen record inflows as investors and developers attempted to avoid the Ethereum network due to soaring gas fees.