.intotheblock takes a look at the impact of layer 2 solutions on Ethereum's fees and the value of $ETH, as developments in the L2 space ramps up. 🔎
For the first time Layer 2 are recording a higher number of transactions occurring when compared to Ethereum's mainnet ecosystem. This means that there are now more transactions and activity on L2 than on Ethereum’s L1 ecosystem. Although the daily number of transactions on Ethereum's mainnet has been slightly decreasing over the past year, the emergence of Arbitrum and Optimism has compensated for this decline and even surpassed it.
When on-chain activity shifts from L1 to L2s, it will involve a trade-off between a reduction in revenue and an increase in the number of users. If economic activities were to shift to L2s that are more efficient in terms of gas, the total amount of ETH spent on fees would immediately decrease. It's worth noting that despite processing more transactions, L2s only accounted for 4% of all ETH fees during last week.
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