- The layer 2 (L2) blockchains continued to complement layer 1s (L1) amid heightened global crypto adoption.
- Almost all blockchains recorded an increase in daily active users in 2022 led by Ethereum, BNB chain, and Polygon.
The crypto market has recorded major events in the past twelve months both good and bad. According to a report by Binance Research, top layer 1 blockchains including Ethereum, BNB Chain, Solana, and Avalanche recorded significant on-chain activity in 2022. Leading layer 2 scaling solution Polygon (MATIC) gained significant market share following the collapse of Terra Luna. On the other hand, Solana (SOL) network was the most affected by the FTX implosion.
“The year was rife with material events in arguably the most important sub-sector within crypto,” the Binance report noted.
Evidently, Almost all blockchains recorded an increase in daily active users in 2022 led by Ethereum, BNB chain, and Polygon. However, the number of daily transactions on almost all blockchains significantly declined in 2022 apart from Solana which saw an increase of about 2 million in daily transactions.
The layer 2 (L2) blockchains continued to complement layer 1s (L1) amid heightened global crypto adoption. The Ethereum merge was the largest event of the year following a successful migration of the ETH mainnet to the beacon chain.
There has been an idea that has been discussed among many in the crypto space that the major L1s will simply become settlement layers, while execution and activity happen on the L2s. While we are seeing a little bit of this already, 2023 might very well be the year that we see this happen on a much larger scale,
Crypto expectations for 2023
The crypto market began 2023 with a bullish sentiment with Bitcoin price obliterating losses incurred on FTX and Alameda fallout. However, market analysts expect the prices to correct and consolidate in the next coming quarters before retesting ATH later this year or next year.
— Peter Brandt (@PeterLBrandt) January 15, 2023
New crypto projects including Solana’s meme coin BONK and Aptos have taken center stage YTD. Furthermore, more institutional investors have shown great interest in the Web3 industry as shown by capital inflows in the past year. As a result, more developers are expected to enter the industry with the high demand for experienced blockchain engineers.
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“Aptos (who went to mainnet in 2022 Q4) and Sui (who are expected to launch in early 2023). Both of these L1s bring various innovations with them, including the Move programming language,” the report noted.
According to Binance, later 2 blockchains are expected to grow exponentially in 2023 and beyond. Moreover, the total value locked (TVL) in L2s is around $4.5B, compared to the total DeFi TVL in Ethereum at $25B, and the total crypto market cap sitting near $900B.