Two new all-time highs for Ethereum

The prices of crypto currencies have risen continuously since early 2023. In addition to Bitcoin, many altcoins have exploded. Many of these are part of the Layer 2 network of Ethereum. This growing network has the largest total value of any blockchain today.

Ethereum's Layer 2 networks alone counted a Total Value Locked (TVL) of more than $19 billion, and reached (again) a record value in December. That's - based on all the headlines surrounding emerging Layer 1 blockchains - nearly four times the entire Solana network. Arbitrum, Ethereum's largest Layer 2 chain, is nearly twice that size.

Comparing the ("fully diluted") total market capitalization of the two protocols ($14 billion for Arbitrum versus $60 billion for Solana) reveals a difference in fundamental valuation. The comparison also reminds us that Ethereum is still in a class of its own when it comes to DeFi.

Total value locked of all Layer 2 networks. Source: L2Beat

Market capitalization stablecoin of all time

The stablecoin market capitalization of a blockchain is a sign of liquidity. Even if it is still far from the norms on the main chain: In the layer 2 sector, stablecoin market capitalization reached an all-time high several times in 2023, most recently in December. In total, the four largest blockchains - Arbitrum, Optimism, Base and zkSync - have nearly US$3 billion in stablecoins linked to their respective networks. Most dominant: Arbitrum, the most popular L2 Ethereum in DeFi.

Stablecoin market cap on the largest Layer 2 networks. Source: growthepie.xyz