There has been a noticeable increase in network activity across the broader Ethereum ecosystem. According to sand analysisExcluding Ordinals-related addresses, there are over 10 million wallets actively participating in mainnet and Ethereum layer 2 solutions such as Base, Optimism, and Arbitrum.
Vitality of the Ethereum ecosystem: 10 million active wallets recorded
This milestone is a direct result of the successful implementation of the Dencun upgrade in mid-March 2024. This update, one of many other upgrades set for Ethereum, effectively addressed pressing issues, particularly those related to scalability and gas fees.
One analyst at predict In the coming bull cycle, that number will expand from 10 million to 100 million. This surge will be fueled in part by Dencun’s enhancements that use rollups to make Layer 2 transactions cheaper.
To achieve this, Dencun uses a new transaction type, “blobs,” to store unprocessed data in the Ethereum Virtual Machine (EVM). Blobs can be considered a new data storage channel within a block that helps simplify block validation. Notably, it does this without compromising data availability. This is a huge improvement over Ethereum layer 2 solutions that integrate Dencun.
TVL Rising Rapidly Across Layer 2 and DeFi Protocols
With lower gas fees and a more efficient Layer 2 platform, Dencun has helped attract new users and revitalize the broader Ethereum ecosystem. This is reflected in the increase in Total Value Locked (TVL) across Layer 2 portals and mainnet.
According to L2BeatOn average, top layer 2 platforms like Arbitrum and Optimism have seen double-digit increases over the past week. To date, all Layer 2 platforms manage over $39 billion in assets. parallel data The case of DefiLlama also highlights this growth. Over the past six months, the TVL of major decentralized finance (DeFi) protocols has grown from approximately $20 billion to over $54 billion at press time.
Despite these advances, challenges remain. Ethereum is fragile and cannot scale efficiently whenever usage spikes. Therefore, it is likely that gas fees will increase in the next bull market, especially if ETH price breaks past $4,000 and hits all-time highs.
Additionally, users (mainly meme coin distributors) may prefer to reduce their activity by using alternatives such as Solana or Avalanche.
Nonetheless, Ethereum supporters remain positive. As cryptocurrency prices stabilize and are likely to adjust for an upward trend in the first quarter of 2024, more users will want to explore some of the best protocols launched via mainnet or layer 2 platforms.
Featured image from Canva, chart from TradingView