03 Jan 2022
Rollup action on EthereumEthereum Layer-2 (L2) scaling solution Arbitrum has been climbing through the roof since its public launch on Aug 31st, with a current total value locked (TVL) of $2.69B—45.7% of the ETH L2 market share.
Layer-2s, a collective term for solutions designed to scale Ethereum by handling transactions off-chain while relying on Ethereum’s security, is a growing trend that took off in the second half of 2021. Rollups are a Layer-2 solution designed to decongest the Ethereum network by “rolling-up” transactions together, processing them off-chain before sending the results back to Ethereum, thus making them faster and cheaper. The current issue with using L2s is that they need to increase liquidity and become trustless enough so that all these scaling solutions can share the same infrastructure to not cause ecosystem fragmentation. However, it is in the works. Meanwhile, L2s use ETH for gas but are incentivized to create DAO governance tokens to decentralize operations over time. The LRC token associated with Loopring accounts for 77.17% of its TVL, and its price has surged by 443% in roughly two months.