L2

Starknet to hand 10% of network fees to devs, with $3.5M in first distribution

The Devonomics initiative from the Starknet Foundation aims to return a portion of network fees to incentivize developers.

Layer-2 network StarkWare and the Starknet Foundation are set to distribute a 10% cut of network fees to developers, a part of a pilot program called “Devonomics.” 

In an announcement shared with Cointelegraph on Dec. 12, StarkWare CEO Uri Kolodny said it was allocating a portion of the network fees, provisionally 8%, to decentralized app builders and 2% to infrastructure engineers and core developers through a transparent and open voting process.

“It’s all about giving the hands-on builders a strong voice in shaping the network,” explained Kolodny.

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Soaring growth of Ethereum layer-2 networks set to continue in 2023

Leading layer-2 networks on Ethereum have seen a surge in daily active users and fees recently.

Ethereum layer-2 networks have gone through an explosive growth phase over the past couple of months, a trend that is set to continue in 2023.

According to recent data, the leading layer-2 networks have seen an increase in daily active users thathas translated into a growth in fees for the respective ecosystems.

According to analytics provider Token Terminal, Polygon leads the pack with 313,457 daily active users as of Jan. 17, a metric that spiked to over 600,000 daily active users earlier in January.

That’s a 30% increase in activity since the beginning of October, resulting in nearly $55,000 worth of daily fees for Polygon.

Optimism has seen even faster growth, with a 190% gain in daily active users over the past three months. This resulted in daily network fees of $119,475, a gain of almost 140% since the beginning of the year.

Arbitrum One currently has 41,694 daily active users, an increase of around 40% over the past three months. Daily fees on the network are just over $40,000, according to the data.

Meanwhile, L2 ecosystem analytics platform L2beat states that Arbitrum has a market share of 52% in terms of total value locked (TVL), which is currently at $2.55 billion. Aribtrum has seen a 9% increase in TVL over the past week.

Optimism, the second-largest L2 network, has a TVL of $1.46 billion, giving it a market share of 30%. Its collateral locked has surged by 15% over the past seven days.

The two together account for more than 80% of all the collateral locked in layer-2 platforms.

Related: Optimism and Arbitrum flip Ethereum in combined transaction volume

There has been an increase of almost 10% in TVL for all L2s over the past week, pushing the total TVL up to $4.89 billion. However, that figure is still down 34% since its peak in April.

Nevertheless, this decline is less than half of the retreat DeFi TVL has made since its all-time high. DeFi collateral has declined by 75% since December 2021, according to DeFiLlama, suggesting that there is greater demand and momentum for layer-2 networks at the moment.

Optimism and Arbitrum flip Ethereum in combined transaction volume

The two layer-2 networks processed more than 1.1 million transactions combined on Jan. 10.

Ethereum layer-2 on-chain activity has been increasing to the extent that the leading two networks now process more transaction volume than mainnet Ethereum.

Layer-2 networks Arbitrum and Optimism have seen an increase in transactions over the past three months. Comparatively, aside from a few spikes, transactions on the Ethereum network have declined by around 33% since late October, according to Etherscan.

This has enabled the two L2s combined to flip Ethereum for this metric, according to Dune Analytics data.

The chart shows Ethereum processed over 1.06 million transactions on Jan. 10, whereas Arbitrum and Optimism combined processed over 1.12 million transactions.

Additionally, Optimism has now surpassed Arbitrum in terms of daily transactions following a steady uptrend in activity since September.

Layer-2 ecosystem analytics website L2beat reported all L2 activity in terms of transactions per second (TPS) surpassed that of Ethereum in October, and has remained above it since.

L2 activity in TPS – l2beat.com

On Jan. 10, Ethereum processed an average of around 12 TPS, compared to the L2’s average of nearly 16.5 TPS.

Arbitrum and Optimism combined represent almost 80% of the entire layer-2 ecosystem, according to L2beat.

Arbitrum One remains the market leader in terms of total value locked (TVL) with around $2.34 billion in collateral, giving it a 52.5% market share.

Optimism is in second place with a TVL of $1.28 billion and a 28.6% market share.

Cast your vote now!

According to Nansen researcher Martin Lee, decentralized finance (DeFi) protocols are one of the key drivers of the adoption of the Optimism chain.

Related: Can the Optimism blockchain win the battle of the rollups?

Other layer twos such as zk-rollup StarkNet have also been processing more transactions recently. StarkWare technology also powers other solutions including ImmutableX and dYdX.

In October, it was reported StarkNet was processing more transactions per week than the Bitcoin (BTC) network.

Additionally, Starkscan reports the network is at an all-time high in terms of TVL at $5.2 million.