- Ethereum layer-2 networks recorded $60 billion in TVL in early December 2024, led by Arbitrum One and Base.
- Decentralised sequencers could enhance scalability and interoperability, says Metis co-founder.
What happened: Ethereum layer-2 networks see exponential growth
Layer-2 scaling solutions for Ethereum have seen tremendous growth in 2024. According to L2 Beat, there are 118 layer-2 scaling solutions listed for the Ethereum network as of December 2024, hosting nearly 97% of Ethereum’s transaction volume. Metis co-founder Elena Sinelnikova highlighted the reliance of these solutions on centralized sequencers, stating, “Layer-2 solutions were never meant to be decentralized solutions. They are centralized solutions with one sequencer.”
Sinelnikova also addressed efforts by the Ethereum Foundation to promote interoperability among layer-2 solutions as part of Ethereum’s roadmap, “The Surge.” While these initiatives aim to reach a staggering throughput of 100,000 transactions per second (TPS), she argued that decentralized sequencers represent a simpler and more effective alternative. Recent activity supports this growth, with layer-2 networks posting three times more daily transactions in November 2024 compared to March, driving Ethereum fees higher and boosting revenue.
Also read: Layer-2 teams rally behind Ethereum’s overhaul vision
Also read: Who is Gavin Wood? Co-founder of Ethereum, creator of Polkadot and Kusama
Why it’s important
The transition towards decentralized sequencers represents a pivotal step in the evolution of Ethereum’s layer-2 ecosystem. As layer-2 solutions continue to dominate Ethereum’s transaction volume, hosting nearly 97% of all transactions, challenges like scalability, interoperability, and centralization have become more pronounced. The total value locked (TVL) in layer-2 solutions grew from $51.5 billion in November 2024 to over $60 billion in early December, with leading networks like Arbitrum One and Base accounting for $21.5 billion and $14.2 billion, respectively.
Decentralized sequencers could play a transformative role in addressing these challenges. By removing the reliance on centralized entities, decentralized sequencers would ensure more equitable access to Ethereum’s resources, significantly reducing the risk of censorship and enhancing network security. This would also pave the way for increased innovation across layer-2 solutions, fostering a more resilient ecosystem. Analysts believe this shift aligns closely with Ethereum’s broader objectives of decentralization, sustainability, and empowering its global user base. As Ethereum scales towards its ambitious goal of 100,000 transactions per second (TPS) outlined in “The Surge,” decentralized sequencers are likely to become a cornerstone of the network’s future, making it better equipped to handle global-scale applications and cementing its position as a leader in blockchain technology.
