Following the recent halving on April 20th, layer 2 solutions such as Stacks (STX), Elastos (ELA), and SatoshiVM (SAVM) are outperforming Bitcoin itself.
This surge reflects the growing relevance and potential impact of layer 2 solutions in the broader cryptocurrency market.
Stacks, Elastos, SatoshiVM thrive after Bitcoin halving.
STX, the token of Stacks, a prominent Layer-2 network, rose more than 21.36% to hit a price of $2.95. This surprising increase occurred immediately after Bitcoin’s halving, which saw Bitcoin’s coin emissions per block decrease from 6.25 BTC to 3.125 BTC. On the other hand, Bitcoin rose slightly by 4.75% to $66,820.
While STX is the best performer among the top 25 cryptocurrencies, other Layer-2 tokens such as Elastos’ ELA and SatoshiVM’s SAVM also saw gains of 16.14% and 18.64%, respectively.
Bitcoin Layer-2 projects are essential for improving blockchain scalability and transaction speeds. Unlike Ethereum solutions that focus on smart contract scalability, Bitcoin’s Layer 2 solutions aim to add programmability and efficiency to a network that lacks an underlying virtual machine similar to Ethereum.
The surge in these tokens coincided with a surge in Bitcoin transaction fees, which surged to nearly 0.0020 BTC after the halving, the highest since early 2018. This increase is related to the launch of Runes, a protocol that allows creation and generation. Trade tokens directly on the Bitcoin blockchain.
“Bitcoin’s fourth halving, coinciding with the launch of the Rune token standard, led to an unprecedented surge in Bitcoin’s total transaction fees, reaching $80.77 million on April 20,” said analysts at The TIE.
Indeed, the introduction of runes led to a frenzy in minting and trading activity, and with the number of runic inscriptions reaching 3,700, transaction costs became higher.
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Investors are now closely monitoring these Layer-2 networks, recognizing their potential to significantly change the landscape of Bitcoin trading and scalability.
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