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How long can L2s capitalize on the crypto market’s optimism?

  • L2s saw a surge in revenue as interest in the crypto space grew.
  • Token prices grew across the protocols; however, network growth fell.

As the crypto market began to see an uptrend in the last few weeks, the L2 sector witnessed huge growth. Notably, in November, the daily revenue of the four leading Layer 2 projects — Arbitrum [ARB], Optimism [OP], Polygon [MATIC], and BuildOnBase — surged.

Revenues begin to surge

The increase in daily revenue for the top four L2 projects was a positive sign for the cryptocurrency market. It indicated that these projects were gaining more users and generating higher profits. This could boost confidence in the crypto space and attract newer investors.

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Source: token terminal

The growth of the aforementioned L2 projects suggested that theyr were facing increasing adoption. As these projects expand, they can contribute to the overall development and success of the cryptocurrency ecosystem.

Investors and traders may take notice of this trend and consider these L2 projects for their investments, potentially leading to a surge in their token prices. However, it’s crucial to monitor these developments closely to assess the sustainability of this growth in the long term.

The rise in daily revenue also reflects the increasing interest and activity in the crypto space, which is a positive signal for the industry’s future. As more users participate and transact on these L2 projects, it can lead to further innovation and advancements in the space.

In terms of daily activity, Polygon was the busiest, followed by Arbitrum, then Optimism, and finally Base. In the world of DeFi, Arbitrum had the most total value locked (TVL), with Polygon in second place, Optimism third, and Base fourth.

Screenshot 2023 11 12 at 4.34.33 PM

Source: Artemis

For DeFi, Arbitrum was the most popular, and it had the most money locked in its system. People also liked using Polygon for DeFi, followed by Optimism, and Base was the least popular for DeFi.

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In terms of tokens, it was seen that ARB, OP and MATIC observed a surge in price. However, the Network Growth of all these tokens declined over the last few days. This meant that new addresses were losing interest in these tokens.

The falling Network Growth implied that existing holders were collecting more of these coins. However, in the long run, interest from new addresses will play a crucial role in these tokens’ growth.

Polygon on Polygon MATIC 16.47.49 12 Nov 2023

Source: Santiment

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