May ‘24 Layer 2 Landscape Recap

The total value locked (TVL) of all Layer 2s (L2s) witnessed a 15.1% month-on-month (MoM) growth in May, while total transaction count fell by 8.9% MoM. The growth in TVL, despite the decline in user activity, is indicative that the uptrend was mainly caused by price appreciation rather than inflows. This is congruent with the 13.3% MoM increase in crypto’s total market capitalization.

Additionally, gas expenditure continues to fall across the board, caused by both declining user activity as well as the use of data blobs. Rollups that only recently started to employ data blobs, such as Scroll, are seeing a much greater decline in their gas consumption than its counterparts. The revenue generated by rollup operators is also seeing a downwards trend, albeit slower than the gas expenditure.