The number of active users on Ethereum’s Layer 2 networks has sharply declined from approximately 58.4 million to around 30 million. This drop comes at a time when active addresses on Ethereum’s base layer have doubled. Ethereum co-founder Vitalik Buterin emphasized the need for Layer 2 networks to redefine their value proposition beyond scaling, incorporating features such as privacy, specialized applications, and other advanced functionalities. Ethereum is a prominent blockchain platform used for smart contracts and decentralized applications. Layer 2 solutions are designed to improve transaction speed and reduce costs on the base layer. However, recent market uncertainties have led to a decline in their popularity. Despite low transaction fees on Layer 1 and plans to increase gas limits by 2026, this trend persists. The immediate effect has been a notable drop in the prices of major Layer 2 tokens, reflecting diminished market confidence. Moving forward, Layer 2 networks must innovate in utility and features to offer users more efficient and secure services and solidify their position within the blockchain ecosystem.
Source: binance
