July '24 Layer 2 Landscape Recap

Quick Take

• This piece summarizes key metrics and insights in the Layer 2 landscape in July 2024.
• TVL Growth and Transaction Count: In July, Layer 2s (L2s) Total Value Locked contracted by a further 2.8% month-on-month, while transaction count continued to increase by 11.6% MoM. The continuation of these trends from June demonstrates the ongoing decrease in crypto asset prices, with no meaningful inflow of capital to L2 ecosystems.
• Gas Expenditure and Revenue Trends: Gas expenditure by L2s decreased by 18.2% MoM in July, in spite of the increased on-chain transactions, implying that L2s are continuing to reap the benefits of data blobs cost savings. However, operator revenue has dropped significantly further, by over 38.5% MoM.
• Declining L2 Ecosystem Growth: Most L2s have witnessed a drop in most of their metrics in July, congruent with the broader crypto market pullback. However, L2s with recent airdrops, such as Blast and zkSync Era appear to be more negatively impacted as their respective governance tokens experienced a sell-off and significantly reduced the TVLs of their ecosystems.