Activities in Layer2 have established a new record based on gas fees on the ETH blockchain. Based on data collated from Rebuffo through Dune Analytics, activities in the protocol consumed above 30 billion in transaction fees in March alone.
The gas fees came from processed transactions and others in the protocol. The data means Layer2 protocols have attained a new monthly ATH on the prominent deployable chain.
The gas fees have consistently increased from January to March. Despite the rise, transactions on L2 have consumed a negligible fraction of the daily gas fees on the ETH chain. Precisely, the average consumption of Layer2 is not more than a percent of the entire network.
The skyrocketing activities on L2 explains one thing – developers find the layer more affordable to use. The affordability has gained more users into the layer resulting in an increased transaction volume. This is evident in the sharp rise of the protocol’s TVL.
Total Value Locked Rises By 13%
Data from L2BEAT indicates the TVL on Layer2 has hit a record high of $7.2B. The value rose by nearly 13% in the last week, representing the highest percent incline over seven days dating to last November. Also, the recent TVL represents a massive increase from the $50M recorded last January.
Layer2 will continue to attract more transaction volume, given the expensiveness of gas fees on the L1 protocol. Layer1 is a protocol that runs directly on the blockchain. OpenSea is an example of a protocol that runs on L1 on the Ethereum chain.
L2 protocols are not relenting in becoming more affordable for users. Optimism, an L2 is planning to save fees for users with the upcoming update. Arbitrium will also slash transaction fees with the recently implemented upgrade.
Ether Still Soaring in the Market
The increasing TVL and transaction fees have also pumped up the price of the underlying coin Ether in the market. The second-largest crypto based on market cap has been rising throughout the week, exchanging hands at about $3.4k as of this writing. The coin is up by 17% from the beginning of March to date.
Based on market charts, ETH could leverage the momentum and break the $4k barrier. The last time the coin traded above that level was late last year when it reached $4.1k.
The momentum could be caused by the widely anticipated ETH 2.0 upgrade scheduled later in the year. The upgrade will see Ethereum shift from the energy-consuming Proof-of-Work to the low-energy consuming and environmentally-friendly Proof-of-Stake.