September ‘24 Layer 2 Landscape Recap

The total value locked (TVL) across all Layer 2 (L2) networks saw a minor uptick of 6.4% month-on-month (MoM) in September, mainly driven by the slight recovery in token prices after the downturn in August. The total transaction count on L2 networks broke its four-month upward trend with an 11.4% decline, a lagging indicator of the reduction in on-chain activity after the bearish sentiment caused by the downturn in September.

In the August L2 recap, we postulated that the rise in transaction count could be an anomaly, considering that the general market sentiment has not flipped bullish. September’s metrics are evidence that user activity is positively correlated with bullish market sentiment, albeit slower, since user activity tends to slow after the market declines. While some L2s still see an increase in user activity, such as Base and OP Mainnet, most L2s are seeing a drop in their user activity.