Several DApps are choosing L2 scaling solutions over other platforms. Ethereum completes a successful upgrade to a layer two solution early this month.
Ethereum TVL Now Over $1B
An L2beat data revealed that the TVL of assets using ETH L2 scaling solutions is now over $1b. This is a first for the crypto space.
Ethereum networks’ TVL. Source: L2beat
Even though the TVL surged by over 100% in the last 30 days, it rose by 14% this past week. As of mid-last month, it had surged higher than the pre-may high when ETH and other digital assets were on a strong bullish run.
However, two DeFi projects (Dy/Dx and optimism) account for 50% of this TVL. 17% of this value is from Nahmil, an early-stage DeFi solution. However, it allows most of its liquidity to its governance token. L2beat data comprises solutions involving DAOs, NFT platforms, and exchanges.
Other Available Scalability Solutions
While most of these Ethereum-built projects use various scalability solutions, more than 50% adopt the ZK-rollups scalability solution. One reason for the high number of projects using this scalability technique is reduced on-chain fees since data can be rolled up from various transactions.
Other scalability techniques available include state pools, plasma, and Validium designs, and optimistic rollups. However, Cardano continues to make itself a better solution than Ethereum. Today, Cardano developers released a detailed analysis between its hydra scaling solution and Ethereum’s scaling solution called the Arbitron.
NFTs And ETH Price Rise
As bitcoin’s market value is closer to $1tr, ETH’s value has also been rising. ETH has gained more than 100% in the past seven weeks, and its market value is now 25% of the entire crypto space. However, analysts opined that the increasing interest in NFTs is the sole reason for the rise in ETH value.
Ethereum-built NFTs have been the rage since the beginning of the year, and last month, total NFT trading volume surpassed $3.5B. One reason why creators love NFTs is their revenue-generating process which allows them to expose digital versions of the works to a global audience. While there are NFT marketplaces for specific niches, the OpenSea platform remains the most popular NFT marketplace.
NFTs Create More Profit Possibilities
Also, many creators now realize that NFTs are an excellent way for them to authenticate their artworks. Hence, the demand for NFTs keeps rising, especially since the turn of the year. As a mechanism for digitizing property rights is being developed, it is a sign that the NFT market hasn’t peaked yet.
When this mechanism becomes a reality, many more creators (regardless of their niche) will become interested in creating and monetizing their content using NFT. Thus, the ways of utilizing NFTs are diverse as they would have a huge role in the future of commerce globally. For example, NFT can make it possible for anyone to share the profits of renting a valuable item. Hence, NFTs may further boost the value of ETH in this new commerce world.