Polygon Takes Lead as Ethereum Layer 2 Networks Experience Surge in Daily Users – Report

• The three Ethereum layer 2 networks, Polygon, Optimism, and Arbitrum One, are currently experiencing spikes in daily users leading to cost growth for each ecosystem, data analytics platform Terminal said.
• Polygon, a sidechain scaling solution that enables fast transactions and low fees, has nearly doubled the number of active users over the last three months. It reached over 600,000 daily users earlier this year, a 92% increase from 313,400 daily users in October 2022.
• Optimism, a scaling solution built for Ethereum developers, has also seen a daily user spike of 190% over the last three months. It has also achieved at least 140% gain in daily network fees since 2023 started.

Three Ethereum layer 2 networks – Polygon, Optimism, and Arbitrum One – are currently experiencing spikes in daily users leading to growing costs for each ecosystem, data analytics platform Terminal said.

Polygon, a sidechain scaling solution that enables fast transactions and low fees, has nearly doubled the number of active users over the last three months. It reached over 600,000 daily users earlier this year, a 92% increase from 313,400 daily users in October 2022. The increase also resulted in daily network fees of nearly $55,000 for Polygon.

Meanwhile, Optimism, a scaling solution built for Ethereum developers, also saw a daily user spike of 190% over the last three months. It has also achieved at least 140% gain in daily network fees since 2023 started.

And finally, Arbitrum One, developed by New York-based company Offchain Labs, has seen a 40% increase in active users over the last three months. From nearly 30,000 last October 2022, it currently has around 42,000 daily users.

What is Layer 2 Network?

Layer-2 scaling solutions are technologies running on top of blockchain protocols that claim to increase the speed and efficiency of the Ethereum blockchain. Basically, this network was created to support Ethereum, which has reached a certain limit due to the large number of transactions. This limitation of the Ethereum blockchain results in network congestion, longer transactions, and higher gas fees.

As such, this layer 2 network will help overcome network limitations by processing transactions on third party networks, not the Ethereum mainnet. Through this layer 2 network, the congestion of the Ethereum mainnet will be reduced and will help maintain the same security and decentralized standard of the Ethereum blockchain.

Some of the advantages of using a layer 2 network include increased transaction times, lower gas fees, and the extra security that the network implements. However, some of the drawbacks of using a layer 2 network include the removal of liquidity from the Ethereum blockchain, and potential security and privacy vulnerabilities.

This article was published on BitPinas: Polygon Leads as Ethereum Layer 2 Network Experiencing a Surge in Daily Users – Report

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