Ethereum layer 2 networks, together with Optimism, Arbitrum, and Polygon, noticed a surge in recognition in Q1 2023, in response to a report from Web3 improvement platform Alchemy. The report, titled “Web3 Improvement Report,” cites knowledge from Dune Analytics and exhibits that Ethereum customers bridged over $635,000 value of crypto property to those networks from January to March, a big improve of 44% over the fourth quarter of 2022 and 518% over the primary quarter of 2022.
The expansion in bridged property could have been pushed by profitable airdrops from Optimism and Arbitrum in Q1 2023, as recommended by the Alchemy report. Moreover, layer 2s noticed better exercise from builders, with the deployment of good contracts associated to layer 2s rising by 160% in comparison with Q1 2022, regardless of a 30% lower from This fall 2022.
Layer 2s have been supplied as an answer to Ethereum’s scalability drawback, which has been inflicting excessive gasoline charges since as early as 2020. By enabling extra transactions to be processed off the principle Ethereum community, layer 2s can considerably cut back the charges required to work together with the blockchain. Because of this, customers are more and more turning to those new scalability options.
This pattern is mirrored within the broader Ethereum ecosystem, with elevated developer curiosity noticed in Q1 2023. In line with the Alchemy report, Ethereum software program improvement kits (SDKs) akin to Ethers.js, Web3.js, Hardhat, and Web3.py have been downloaded 1.9 million instances within the first quarter of 2023, an 8% improve from Q1 2022. Downloads of the MetaMask SDK, a software used to develop apps that may work together with Ethereum pockets MetaMask, additionally elevated in every month of the primary quarter.
The crypto business is coming off the again of a steep downturn in buying and selling quantity and crypto costs throughout 2022, with scandals just like the UST depegging and FTX collapse inflicting many buyers to draw back. Nonetheless, regardless of this destructive sentiment, customers nonetheless flocked to those new scalability options.
Whereas layer 2s have confirmed to be a useful gizmo for bettering Ethereum’s scalability, some consultants have argued that sharding the Ethereum community will even assist to chop down on gasoline charges. Sharding entails breaking apart the Ethereum community into smaller, extra manageable items, permitting for extra parallel processing of transactions. In the end, a mixture of options will probably be obligatory to handle Ethereum’s scalability challenges and sustain with rising demand.