ON–192: L2s 🌔

Coverage on Polygon zkEVM, Scroll, Base, zkSync, and Starknet.

Nov 10, 2023

ON–192: L2s 🌔

About the Editor: Spencer Noon is an independent angel investor. Looking to get in touch? DM him on Telegram or reply to this email and say hi 👋

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Layer 2s 🌔

① Polygon zkEVM 🟣

📈 Polygon's CDK stack: ~2x growth in usage, 30-minute withdrawals and three more chains over the past 30 days

  • Polygon zkEVM is built on Chain Development Kit (CDK), a collection of open source, modular components to launch a custom blockchain within the Polygon and Ethereum Ecosystem. Polygon zkEVM (built on top of CDK) has seen continued growth in active wallets, transactions and TVL. Compared to the 30 days prior, the 7D moving averages of active wallets and transactions had increased by 105% and 83% respectively. Its TVL has increased by 14% in a similar period. On 8th Nov, Polygon’s zkEVM had 15.5k daily active wallets and 56.8k daily transactions.
Source: Covalent - @peter; DefiLlama
  • Polygon zkEVM has seen 14K wallets finalizing 39,000 withdrawals of at least 101 different tokens on Ethereum within 24 hours of initiating a withdrawal on Polygon zkEVM. After 20th July, there has been a notable increase in number of withdrawals facilitated within 24 hours, making Polygon zkEVM one of the fastest native bridges.
Source: Covalent - @peter
  • Chains leveraging on the CDK stack include Astar, Canto, Near and Palm. In total, these chains (including Polygon zkEVM) have already had almost 11M active wallets, and 452M transactions since 2022. They bring about $162M in TVL to the CDK ecosystem.
Source: Covalent - @peter; Flipside Crypto - @petertherock
  • 💦🔬 Tx-Level Alpha: 35 minutes. That is the amount of time this wallet took to claim and receive 105.77 ETH (USD $224,000) on Ethereum from Polygon zkEVM via the native Polygon zkEVM bridge after initiating the withdrawal. Polygon's CDK functionality of nearly instant withdrawal periods makes Polygon zkEVM one of the fastest native bridges for wallets to send funds from L2s to Ethereum.

② Scroll 📜

📈 Scroll mainnet amasses $36M+ TVL, 3M+ txs & 1M+ addresses in 3 weeks

  • Scroll is the community-first, native zkEVM built upon Ethereum—designed for scaling without sacrificing security, developer, or user experience. Scroll officially announced its mainnet launch on October 17th, 2023, and has since seen rapid growth. Bridged Total Value Locked has surpassed $36M, with around half of that in DeFi protocols (likely to increase as more projects are indexed). Transactions and Unique Addresses are both trending sharply upwards, with over 3M and 1M, respectively.
Source: Scrollscan; DefiLlama; L2Beat
  • Since genesis block, average daily gas prices have plummeted by 84%. For zkEVMs in the initial stages, tx costs actually trend significantly downwards (and stabilize) as the number of users and txs increase; this is due to fixed prover costs being amortized over a larger set of users.
Source: Scrollscan
  • To celebrate mainnet, on October 26th Scroll announced Scroll Origins NFTs for early smart contract deployers post-Genesis Block. The campaign has already successfully increased deployments on Scroll, with average verified contracts up 92% since the announcement (~1000/day over past few days).
Source: Scrollscan
  • 💦🔬 Tx-Level Alpha: This is the creation transaction for the L2ScrollMessenger contract—eagle-eyed users noticed the contract's 46-digit ETH balance and were confused. The way this uniquely-designed contract works is: it starts with a preset ETH balance from the genesis block, meaning when ETH is deposited on Ethereum, an equal amount is dispensed from this contract on Scroll, akin to "minting ETH". This is a more optimized approach that makes deposits both more cost-effective and technically straightforward.

③ Base 🔵

📈 Base hits 40% contract deployment market share, represents 80%+ of total ETH deployments

  • Base is an Ethereum Layer 2 network developed by Coinbase and built on Optimism - the second largest L2 ecosystem behind Arbitrum by TVL. Sequencers on Layer 2s bundle transactions from users and submit them to Ethereum - like an air traffic controller. Base sequencer revenue is likely to have generated $7m for Coinbase in Q3, largely due to the usage of social finance platform Friend.tech. Sequencer revenue by the end of Q3 had fallen 74% from its August peak, now generating ~$200k-$300k weekly.
Source: Re7 Capital; Dune Analytics - @@niftytable
  • Friend.tech fees paid to Base from transactions represented ~10-13% of total monthly fees paid by users to sequencers since inception, paying 20+ ETH at its peak. Revenue from the app declined since September in line with total sequencer fees pointing to more muted activity in the broad ecosystem.
Source: Re7 Capital; Dune Analytics - @web3academypro
  • Despite declining sequencer revenue, the # of contracts deployed on Base has outpaced all other major L2s since its launch in June 2023, averaging 40% of weekly contract deployments for leading L2s. Base is now deploying 80-180% of the number of contracts deployed on Ethereum L1, pointing to a relatively strong ecosystem for developer activity.
Source: Re7 Capital; Artemis
  • 💦🔬 Tx-Level Alpha: The transaction is the first inflow into a Maple Finance pool of $500k USDC. This came as as Maple announced they will be launching on-chain capital markets on Base starting with a cash management pool on November 1st. This is meaningful because it's a first-of-its-kind credit marketplace on Base and arguably marks the start of institutional DeFi momentum on the L2.

④ zkSync 🏎️

📈 zkSync Era passes 150k paymaster transactions

  • zkSync Era, a Layer 2 zkEVM created by Matter Labs to scale Ethereum, is averaging ~1k paymaster transactions per day, across an increasingly varied number of dApps. A paymaster is a smart contract that enables dApps and wallets to sponsor user transactions and pay for gas in any ERC-20 token, with custom logic for when users are eligible for these features. Paymasters on zkSync Era are enabled by native Account Abstraction built into the protocol, and do not require 3rd-party bundlers as with ERC-4337 implementations.
Source: Dune Analytics - @matter_labs
  • Pudgy Penguins expanded into physical retail with Pudgy Toys, a toy line that serves as a gateway to Pudgy World, an open-world digital player experience on zkSync Era. 14,216 wallets have joined Pudgy World through QR codes included with Pudgy Toys.
Source: Dune Analytics - @matter_labs
  • zkSync Era and Arbitrum are leading in daily transactions, both averaging 500-800k daily transactions for the last few weeks. In October, zkSync Era passed 150M total transactions, making it one of the most battle-tested L2s.
Source: Artemis

⑤ Starknet ✨

📈 Starknet has the highest number of active devs (515) of all L2s

  • Starknet boasts the largest and fastest adoption by developers among all new ecosystems, ranking 7th across all crypto ecosystems. Over 80% of projects are Starknet native, with some extremely promising verticals in Onchain Gaming (Loot Survivor, Briq, Influence, Dojo) as well as Account Abstraction with Argent announcing going full time on Starknet and DeFi with the likes of Ekubo and RabbitX.
Source: Electric Capital’s Developer Report (Note: Polygon’s PoS is technically a combination of a sidechain and a layer 2.)
  • Starknet hit production ready with the 0.12 upgrade, known as Quantum Leap, averaging at 8.2 TPS since August. It does not show the full picture though: with native Account Abstraction (AA), Starknet tx is equivalent to 1.5 EVM tx thanks to Multicall, an AA feature, improving UX and security.
Source: Flipside Crypto - @Hessish
  • Starknet DeFi is picking up with AVNU (a DEX aggregator) doing $500M volume after 5 month and Ekubo (by a former Lead Eng at Uniswap) is generating a yearly fee for LPs of $600k for a current TLV of $3M. DeFi TLV keeps on growing despite no incentive mechanism.
Source: DefiLlama
  • 💦🔬 Tx-Level Alpha: This is a random block on Starknet. This block is composed of many multicalls as seen under operations. Those are the direct results of Native Account Abstractions, also known as Smart Wallets. In one Tx, one can approve and swap, resulting in a much improved UX and security as nothing can get drained from a resulting proxy hack. It also means TPS is flawed and this is why L2Beat is pushing for UOPS (UserOps per se) as a new metric.