March 2024 Layer 2 Landscape Recap

The total value locked (TVL) of all Layer 2s (L2s) rose by 24.4% month-on-month (MoM), though most of this growth stemmed from the growth on Arbitrum One and Base. Together, Base and Arbitrum One contributed to $5.7 billion of the $8.4 billion increase in L2s’ TVL. Overall, the on-chain metrics for most L2s also indicate a slowdown in usage.

This month's most significant on-chain development would be the Ethereum Dencun hard fork, which implemented data blobs, bringing down the data costs for L2s that choose to adopt data blobs instead of using the calldata method for posting transaction data. As a result, we are beginning to see a slight decrement in L1 data fees incurred by L2s.