Ethereum Layer-2s Hit Record Highs with $13.5B in Stablecoins Locked

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As a researcher with years of experience in the dynamic world of blockchain and cryptocurrencies, I find the recent surge in stablecoins locked on Ethereum‘s layer-2 platforms truly intriguing. It’s like watching a seed sprout into a mighty oak, transforming the landscape of the crypto ecosystem.

The system built around stablecoins is achieving new heights, with Ethereum’s layer-2 networks serving as the bustling hub. As of December 20th, a total of $13.5 billion in stablecoins are securely held on Ethereum’s layer-2 infrastructure, thanks to increasing acceptance in cryptocurrency transactions and remittances, according to the latest data from Tie Terminal.

It’s clear that Arbitrum One and Base have played significant roles in this progress. As shown by DefiLlama, Arbitrum holds approximately $6.73 billion in stablecoin value, while Base manages around $3.56 billion. Combined, these networks have strengthened the total stablecoin circulation, which now stands at a combined market capitalization of roughly $205 billion across various blockchain platforms.

The increasing use of stablecoins underscores their significance in today’s cryptocurrency trend. As stated by Matthias Seidl, co-founder of growthepie.xyz, stablecoins have emerged as one of the most influential applications, with layer-2 platforms reaching unprecedented levels of value locked within them.

One of cryptos killer use-cases in this cycle are Stablecoins. Layer 2s just reached a new ATH in stables locked on them.Almost $12B is now used on all Layer 2s combined.For perspective:– BSC has $6.6B– Solana has $4.7B– Avalanche has $2.3B

— matze | growthepie.xyz 🥧📏 (@web3_data) December 16, 2024

Tether (USDT) Surpasses $140 Billion by Year End

In the realm of stablecoins, Tether (USDT) reigns supreme. Beginning 2024 with a market cap of $91.7 billion, USDT experienced consistent growth month after month, reaching an impressive $140.88 billion by December 19. In contrast, Circle’s USD Coin (USDC) achieved its maximum for the year at $42 billion in 2024. However, it still falls short of its all-time high of $55.8 billion, which it reached back in June 2022.

After November 7th, a significant increase in the use of stablecoins became apparent as the total market value reached approximately $123 billion. This upward trend persists, suggesting that more and more people are becoming confident in using stablecoins as a secure method of transaction within the digital currency world.

The wider Ethereum network gained momentum as well, with stablecoins becoming more significant in practical uses. These digital currencies are now being utilized in various scenarios such as cross-border payments and large-scale transactions, demonstrating their importance within the cryptocurrency sector.

Ethereum Upgrades Shift Activity to Layer-2 Networks

The adoption of Layer-2 solutions has significantly increased after Ethereum’s Denver upgrade this year, which decreased transaction fees and stimulated roll-up activity. Currently, Base processes around 8 million transactions per day, a substantial increase from the 400,000 it handled in March. Similarly, Taiko reports over 3 million daily transactions, demonstrating its growing popularity, as indicated by Growthepie’s analysis.

Contrarily, Linea has experienced a concerning drop, going from about 800,000 daily transactions at its peak to just 200,000 now. Nevertheless, Layer-2 rollups have been boosting Ethereum’s activity, even causing temporary deflation in ETH supply. This shift has been significantly influenced by the introduction of Blob usage during the Dencun update, which has burned over 1,200 ETH since its deployment.

Arbitrum remains dominant in the stablecoin market, followed closely by Base and Optimism. The introduction of Blobs, designed to store data temporarily and reduce costs, underscores the significance of Layer-2 solutions in Ethereum’s future plans. Vitalik Buterin, founder of Ethereum, sees this as a key intermediate step for maintaining ETH’s deflationary trend.

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2024-12-20 19:57