DeFi & L1L2 Weekly – 📈 Ethereum L2 Transactions Hit Record Highs, Resulting in Fees to Drop

Ethereum L2 transactions hit record highs, resulting in transaction fees to drop. Optimism to introduce Layer-3 applications to the Superchain. Cosmos-based Osmosis is launching a Bitcoin L2.

May 14, 2024 DeFi Weekly

Weekly DeFi Index

This week’s market capitalisation, volume, and volatility indices were negative at -5.87%, -9.78%, and -75.71% respectively.

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Chart of the Week

Ethereum Layer-2s (L2s) surged to new all-time highs, as more activity and an increasing number of transactions are being settled on L2s. L2 transactions represent about 87% of total transactions on the Ethereum network, compared to 77% before the Dencun upgrade. The number of distinct addresses interacting with L2s has also reached 5.5 million –  more than double the number on the Ethereum mainnet.

The ongoing heightened activity on L2s could be attributed to the completion of the Dencun upgrade, which significantly reduced the fees for L2s and, in turn, attracted more users to L2 rollups and sidechains. Meanwhile, the lowered transactions drove the drop in transaction fees on Ethereum, as the average transaction fee hit a record low of US$1.712 as of 12 May.

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  • GMX is proposing to bring the decentralised derivatives trading platform GMX v2 to Solana via the launch of GMSOL. GMSOL will operate as an independent project while closely working with GMX, and all value measurements and storage will exclusively utilise the GMX token.

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News Highlights

  • Optimism is expanding its blockchain capabilities by introducing Layer-3 (L3) applications on the Superchain. The Superchain, powered by the OP Stack, aims to enhance developer accessibility by providing L3 features and functionality.
  • MakerDAO unveils plans to introduce two new tokens to its ecosystem, under the codenames ‘NewStable’ (NST) and ‘NewGovToken’ (NGT). NST will be the upgraded version of DAI, and NGT will replace MKR with a denomination of 24,000 NGT per MKR.
  • Cosmos-based DeFi hub Osmosis is launching a Bitcoin L2. Osmosis is set to roll out ‘Alloyed Bitcoin’, a product consisting of a basket of variants of BTC from throughout the ecosystem.
  • The Runes protocol experienced a significant decline in activity following its initial surge, with a notable decrease in new mints and wallet interactions by 10 May. The protocol’s fee revenue has steadily declined, despite earning hundreds of thousands of dollars daily in fees. 
  • L3 blockchain Degen Chainexperienced a significant outage as the network stopped at block #15524774 and has not produced a block for 12 hours. The incident has rendered various applications to be inoperable and raised concerns about the stability of the platform, highlighting potential issues with its operational reliability.

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