9 visual charts to help you understand the real status of L2

Original source: Stacy Muur X account

Author: Stacy Muur

Compiled by: Deep Tide TechFlow

The red market is the ultimate test of protocols, revealing the true distribution of users.

This is my in-depth study on the state of Ethereum L2, featuring rich visuals and on-chain data analysis.

Since 2023, Ethereum L2 has rapidly risen, with @l2beat currently tracking data from 74 L2s and 30 L3s.

However, only a few general-purpose Rollups have gained widespread attention, attracting significant TVL and users. This study focuses on the nine largest Rollups among them.

Market Capitalization: Circulating Market Cap and Fully Diluted Market Cap

Currently, most L2s have a fully diluted valuation (FDV) reaching billions of dollars, but their circulating market cap is less than 1 billion dollars, indicating that most tokens have not yet entered market circulation.

The only exception is @0xMantle, with 52% of its supply already unlocked, making it the only L2 with a circulating market cap exceeding 1 billion dollars.

High FDV and low circulation are among the main reasons many recent airdrops have failed to meet user expectations.

Assessing current valuations is challenging, and there is uncertainty regarding potential downward trends in the future.

Total Value Locked (TVL)

In terms of TVL, all chains, except for those with ongoing incentive programs like @Scroll_ZKP, @LineaBuild, and @0xMantle, have experienced a tough summer.

However, compared to Scroll's newly launched program, Linea's nearly year-long airdrop program has seen a decline in community interest.

Among the underperforming chains, @zksync and @blast have been the most affected, as both chains issued their tokens this year, leading to liquidity shifting to more attractive options.

Fees and Transaction Activity

Since Dencun, DA has no longer significantly driven ETH's economy, impacting fees on Ethereum and L2s. Therefore, analyzing fee dynamics alongside transaction activity is particularly important.

In this regard, driven by speculative activity, @base is seen as the primary destination for new memecoin launches on Ethereum L2, showing strong appeal with continuously growing transaction volumes.

In contrast, despite @LineaBuild having ongoing incentive programs, the performance of @zksync and @LineaBuild has been underwhelming.

Monthly Active Users (MAU)

Changes in MAU are an important indicator for assessing user retention on chains, showing similar trends.

@0xMantle and @base performed well, while @StarknetFndn, @zksync, and @blast performed poorly.

By comparing MAU data with fully diluted valuation (FDV), it is evident that Starknet is significantly overvalued compared to Arbitrum, Optimism, and even ZKsync.

Bridging Inflows and Outflows

Net bridging flow is an important indicator for measuring new user and capital inflows.

Among L2s, those with positive net flow include @Arbitrum, @StarknetFndn, @Optimism, @base, and @0xMantle, with @0xMantle showing the largest gap between inflows and outflows.

In contrast, @LineaBuild, @zksync, and @blast exhibit negative net flow.

Developer Activity

Finally, developer activity is measured through core development projects and the number of code submissions. This data helps assess the current productivity of teams and identify any potential staff reductions.

Most surprisingly, @blast currently has over 300 core developers (in contrast, most L2s typically have only 30-50). This large team has also contributed a significant number of code submissions.

What exactly they are working on remains unknown.

If you want to delve deeper into the impact of airdrop activities on various metrics of Ethereum L2, you can check out my article on Substack titled “The State of Ethereum Rollups.”

This article summarizes my research conclusions and expresses my personal views on the power distribution of Ethereum Rollups.

In short: ZK Rollups still have a long way to go before achieving mass adoption (which is unfortunate).