The Ethereum network has become home to several layer-2 blockchains. However, only a few of these networks are seeing mass engagement.
According to on-chain data from blockchain explorer Etherscan, the Ethereum layer-2 scaling network Polygon comes out as the top destination for users bridging assets from Ethereum to trade on layer-2 solutions.
Relevance of L2 Solutions
Ethereum network was originally created with the proof-of-work (PoW) consensus mechanism, a process that requires a lot of time to process transactions and create new blocks. Although Ethereum has since moved on from the PoW system, the network’s developers are yet to deploy upgrades that will make on-chain transactions cheap and fast.
Layer-2 networks serve as a solution to Ethereum’s congestion in the meantime. These are secondary protocols or systems built on an existing blockchain (often called layer-1 blockchain) to make transactions faster and cheaper. At the same time, users of these L2 blockchains benefit from the security common to the underlying layer-1 network.
Polygon, Arbitrum, Optimism, Base, and more are examples of L2 solutions built on the Ethereum network.
Polygon – Top Choice for Bridging Ethereum
A breakdown of the leading blockchains that investors interact with when bridging assets across the Ethereum mainnet shows that Polygon held the lion’s share, representing 39%. Trailing Polygon is the L2 network Arbitrum, which holds 31.9%, as shown in the pictorial illustration below.
Other networks holding a significant portion of the list are Optimism and dYdX, which hold 12.9% and 5.8%, respectively.
Investors’ choice of the Polygon network is not far-fetched. Aside from its notable network speed and cheap fees, the L2 blockchain houses multiple blockchain projects, and it unveils several features from time to time. For example, earlier this year, the L2 solution revealed its plan to launch the zero-knowledge Ethereum Virtual Machine (zkEVM) mainnet beta, a technology bolstering network scalability.
Polygon also incorporated the domain name system (DNS) into its ecosystem by rolling out a .polygon domain. These domain addresses serve as unique identifiers for their owners. In July, Polygon Labs, the firm behind the Polygon network, revealed a proposal to replace its native MATIC cryptocurrency with a POL token.
Meanwhile, the MATIC token has a trading price of $0.52, representing 5% over the past 24 hours.
(Source: CoinStats)
