Ethereum L2 and Public Chains: Analysis of Ecological Pattern Evolution

The current data trends and the development direction of Ethereum technology are worth paying attention to.

1. Distribution of DeFi TVL and Trading Volume

The TVL rankings of Arbitrum and Optimism have entered the top ten, and the daily trading volume of DeFi has even made it into the top five.

In terms of TVL, Arbitrum ranks fifth, only behind Ethereum, BNB Chain, TRON, and Polygon, surpassing Avalanche, Solana, and other public chains. Optimism ranks eighth, also exceeding most public chains.

In terms of 24-hour DeFi trading volume, Arbitrum ranks third, while Optimism is fifth. Arbitrum is only behind Ethereum and the BNB Chain, having surpassed most public chains. Optimism is also only behind Ethereum, the BNB Chain, and Polygon, similarly surpassing the vast majority of public chains. DeFi trading volume reflects the level of activity on the chain to some extent.

2. Development Status of Ecological Projects

L2(Arbitrum and Optimism) have a complete range of DeFi, NFT, and GameFi projects, and major DeFi protocols on L1 such as Aave, Uniswap, Synthetix, and Perpetual all provide services on L2.

At the same time, some native L2 projects are also showing potential. For example, the game ecology project on Arbitrum, magic network ( TreasureDAO ), attempts to create a web3 version of Nintendo, providing underlying services for different games and initially forming an ecological prototype. Some games have attracted community attention, such as the beacon, which has surpassed 20,000 independent addresses within two weeks of launching its prototype. In terms of DeFi, as of the time of writing, GMX has a total trading volume exceeding $70.9 billion on Arbitrum, with total protocol fees exceeding $9.3 million.

According to the data, there are 58 projects on Arbitrum with over 1000 user addresses and 39 with over 10,000; there are 40 with over 1000 monthly active addresses and 24 with over 10,000. On Optimism, there are 50 projects with over 1000 user addresses and 32 with over 10,000; there are 33 with over 1000 monthly active addresses and 20 with over 10,000.

Currently, the protocols with a high number of active addresses and interactions on Arbitrum include Uniswap, Sushiswap, GMX, Hop, TreasureDAO, Galxe, StarGate, dopex, and others. On Optimism, the protocols with a high number of active addresses and interactions include Uniswap, Perpetual, synthetix, Velodrome, Rubicon, Pooltogether, Thales, and others.

L2 ecosystem projects have begun to take shape. With better portability, as costs decrease and throughput increases, the pace of ecosystem development is expected to accelerate. From the current situation, the L2 ecosystem has surpassed most public chains.

3. Analysis of Active Addresses

From the daily active user data:

The daily active addresses on the BNB Chain, Ethereum, and Solana are all higher than those on Arbitrum and Optimism, while Avalanche is on the same order of magnitude as Arbitrum and Optimism.

In terms of trends, the number of daily active users on Ethereum has seen a slight increase over the past six months; BNB Chain has remained relatively stable; Solana has recently declined; Avalanche has shown a downward trend over the past six months. In contrast, the daily active users on Optimism have significantly increased, rising from less than 10,000 six months ago to around 30,000-40,000; Arbitrum has also seen a notable rise, increasing from around 15,000 to about 40,000-50,000.

With the evolution of technology, especially after the launch of EIP-4844, the daily active addresses on L2 are expected to continue to increase. In the next 2-5 years, there may be significant changes in the ranking of daily active addresses on L2.

4. Comparison of Trading Volumes

Currently, Ethereum's daily trading volume is about 1 million, Arbitrum about 360,000, and Optimism about 350,000. Over the past year, L2 trading volume has continued to rise, while the Ethereum mainnet has remained relatively stable. The long-term trading volume of L2 is expected to exceed that of Ethereum L1. Solana considers internal consensus messages as transactions as well, resulting in its numbers being much higher than other chains.

It should be noted that the transaction volume does not fully reflect the activity of the chain. Low fees may lead to a large number of low-quality transactions. To assess transaction quality, one should primarily look at the active dApps in the ecosystem and their real user count and interaction volume.

Therefore, judgments on the overall transaction volume should be made with caution.

5. Fee Situation

L2 fees have been significantly reduced. Sending Ether and exchanging tokens costs less, ranging from a few cents to a few dimes. Compared to L1, the cost of sending Ether has decreased by more than 10 times.

Compared to other public chains, Solana has the most obvious cost advantage, with a total fee of only 99.17 SOL in 24 hours and an average transaction fee of only 0.0000057 SOL.

Except for Solana, other public chains do not have a significant cost advantage compared to L2. The fees for Arbitrum and Optimism are comparable to Avalanche and are better than most public chains.

More importantly, the fees for Optimistic Rollup and ZK Rollup still have dozens of times of room for reduction, mainly depending on the implementation of Proto-danksharding(EIP-4844) and danksharding.

EIP-4844 introduces dedicated space for rollup data, bringing new transaction data types and a specialized fee market. Blobs can carry large amounts of data, avoiding current block space competition and reducing gas costs. This makes Ethereum a unified settlement layer and data availability layer.

After the implementation of EIP-4844, rollup transaction fees will be greatly reduced, theoretically having a potential decrease of hundreds of times. Even with just a tenfold increase, it means that L2 fees will also be significantly reduced, and the cost advantages of most individual public chains will disappear. At the same time, Rollup has advantages in consensus, security bridges, and other aspects, which will affect the competition between L2 and other public chains.

The initial Optimistic Rollups solution of EIP-4844 may have advantages, with costs potentially lower than ZK Rollup. However, as the cost of validity proofs decreases, ( still has a hundred-fold optimization space and with the maturity of ZK Rollup technology, the situation may change, and ZK Rollup costs are expected to be lower than Optimistic Rollup. After the implementation of data compression technology, theoretically there is still a hundred-fold increase potential.

If these technologies are implemented, the daily trading volume of L2 could reach tens of millions. This would be sufficient for DeFi and early games.

In summary, once proto-danksharding and danksharding are implemented, Rollup fees may be lower than most standalone public chains, attracting cost-sensitive users to migrate en masse. The rise of BSC, Solana, and Avalanche is attributed to the high fees on Ethereum L1. In the future, after L2 fees are significantly reduced, users and developers may turn to the Ethereum network ecosystem.

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6. TPS Analysis

The TPS data reported by the market is often exaggerated. Third-party measurements are needed, and the TPS for token transfers and exchanges is different, with variations between the testnet and real operational conditions.

TPS is related to the degree of decentralization. The higher the degree of decentralization, the more secure it is, and TPS is often lower. Simply having a high TPS is not entirely an advantage; Web2 has the highest TPS.

According to a benchmark test by a certain capital on Uniswap V2 token swap )swap ETH for tokens(, the approximate TPS calculated based on block gas limits and block time is as follows:

• Ethereum: 9.19+
• Polygon: 47.67
• Avalanche Chain: 31.65
• BNB Chain: 194.6
• Solana: 273.34) is limited by CU, approximately 48 million CU per block (

The Solana block explorer shows a TPS of about 3000, treating internal consensus messages as transactions, while the actual user transaction TPS is about 600.

From these data, the TPS of Solana should be the highest among current single chains, while other chains are mostly between tens to hundreds, relatively improving several times to dozens of times compared to Ethereum L1, but not reaching a hundred times.

Theoretically, Ethereum L2 TPS can reach 1000-4000, and if Proto-danksharding and danksharding are implemented, it is expected to exceed 100,000.

Early actual performance may not reach theoretical values, but it is expected to be comparable to high-performance standalone public chains. With the subsequent technology landing, ) Proto-danksharding is estimated to take over 1 year, while danksharding will take at least 2-3 years (, and L2 TPS will be significantly improved. Combined with Ethereum's security and network effects, L2 may eventually end the public chain competition at some point in the future. Specific timelines still require a longer duration, and everything is still in dynamic evolution, with the possibility of other variables arising.

In addition, L2 does not need to provide substantial subsidies like new public chains to support security; it only needs to attract more developers to build products to promote ecological development.

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The Battle Between Ethereum L2 and Public Chain Landscape May End Within 5-10 Years

Various projects are currently entering the Arbitrum and Optimism ecosystems, with some projects on L2 showing trading activity that has already surpassed L1, such as Synthetix trading more than Ethereum L1 on Optimism. Similar phenomena may occur in other DeFi or crypto games in the future.

As the L2 ecosystem matures, the TVL, active users, and real transaction volume of Arbitrum and Optimism will gradually surpass most public chains. Whether they can surpass a very small number of mainstream non-Ethereum public chains remains to be seen, but the overall ecological level has a higher probability of surpassing. In the future, new public chains may gain opportunities due to narratives or technological breakthroughs, but if they cannot achieve more than tenfold improvements in terms of fees, speed, user experience, etc., surpassing L2 will still be difficult.

The future will be a multi-chain era, and a single chain cannot encompass everything. Currently, Ethereum and its L2 are most likely to become the primary networks, along with a few large chains and ecosystems, as well as many niche-focused chains like game chains, carbon application chains, etc. ).

According to current trends, L2 will become an important competitor to other public chains. If L2 ultimately prevails, it will further enhance the Ethereum ecosystem's network effects ( wallets, development tools, protocols, liquidity, developers, user base, etc. ), consolidating its leading position in the blockchain smart contract field ( and even Web3 ).

In summary, L2 will directly compete with some non-Ethereum public chains. L2 has advantages in terms of security, potential cost reduction, and throughput improvement, as well as leveraging the advantages of the traditional Ethereum network ecosystem, including developers, tools, wallets, protocols, user base, and usage inertia, which may put it in a favorable position in the competition.

Potential Variables in the Pattern Conflict

Another possibility is the sudden emergence of a completely new technological paradigm that could fundamentally disrupt the current scalability of blockchain from different paths. Although the probability is low, it is worth paying attention to, as the future is difficult to predict.

In this case, the current public chain networks are not in their final form, and the blockchain landscape is far from being defined. The real outcome depends on the situation when Web3 truly explodes. ( Currently, Web3 is still very niche, and the actual user base is quite small. Even though Ethereum has hundreds of millions of addresses, the actual number of users is not large. )

Risk Warning: The above analysis is merely a one-sided observation of the market and may not be accurate. Please maintain independent judgment and implement proper risk control.

![How is the world of Web3 divided? An analysis of the evolution of the Ethereum Layer 2 and public chain landscape](