January Layer 2 Landscape Recap

The month-on-month (MoM) growth of Layer 2s’ (L2s) total value locked (TVL) and their usage have tapered off slightly in January. Aside from Manta Pacific, which saw boosted metrics due to the launch of its native token, most other L2s saw mixed growth metrics. Considering that the broader crypto markets have been ranging after the approval of the Bitcoin ETF, it would seem that the L2 ecosystems are mirroring the broader market sentiment. That said, there have been notable airdrops from rollups-as-a-service (RaaS) protocols, such as Altlayer and Dymension, which may spur the proliferation of rollups in the crypto ecosystem.

On January 18, 2024, Manta Pacific launched its native token, MANTA, which significantly increased its TVL from nearly $1 billion to over $1.5 billion. However, the breakdown of Manta Pacific’s TVL highlights a worrying trend: the slowdown of TVL growth in other assets. This means that Manta Pacific is not attracting new liquidity into its ecosystem as quickly as before. This is peculiar since the launch of a token typically incentivizes more liquidity via increased on-chain activity that generates more fees and liquidity incentives. As such, witnessing a slowdown in liquidity growth is not typical for a rollup that recently launched its token.