Updated on January 9, 2023 12:50 PM
Ethereum successfully pulled a stunning technical upgrade by the name The Merge. This upgrade transitioned the consensus mechanism of the blockchain to a proof-of-stake model for processing transactions for six years in proof of work. However, it was seen that post-Merge, activity on layer-2 has dropped by a significant number.
The latest stats from Dapp Radar confirms the declining number of unique active wallets and transactions of over 35% in the last two months(August to September). A similar trend in Ethereum’s TVL was noticed, which fell by 5.6% to $31.41 billion month-to-month. The Total Value Locked(TVL) of Ethereum saw a similar trend, as it fell by 5.6% to $31.41 billion month-to-month.
The post further explains that due to the high economic uncertainty and current macroeconomic landscape throughout the world, and taking consideration that the Merge wasn’t a huge scaling event but a tiny step in the Ethereum’s roadmap, indicators show that the Merge didn’t have a huge impact which people were expecting.
The sidechain protocol, Polygon, known for executing faster transactions and cheaper gas fees also saw a similar declining trend as Ethereum. The FOMO was successfully able to fuel pre-Merge enthusiasm, and it pushed transactions by 6.5% and the number of unique active wallets (UAW) by 4% higher in 2 months(June to August) on the Polygon network.
As the hype faded away, Polygon witnessed a sharp decrease in September. The blockchain witnessed a 33% decrease in transactions and a 17% decline in UAW on a monthly basis.
Ronin, yet another sidechain protocol that happens to be the backbone of Axie Infinity, a play-2-earn game, suffered a similar downtrend. From August 2022, the transactions count and unique active wallets declined by 51% and 54%, respectively.
So far, 2022 has been the worst year for cryptocurrencies. But Optimism, a layer-2 scaling solution for Ether, maintained an upward trend even when its transactions count and UAW fell by 37%. However, it is worth noting that Optimism saw an increase of 194% in transactions count and 275% in UAW. It has been the best-performing blockchain protocol during this crypto winter.
The Total Value Locked for the Optimism blockchain rose by 228%, from $274.46 million to close to $902.74 million, in 2 months(i.e. July to August).
Arbitrum, another layer-2 blockchain solution, was on the winning side this year during the bear market phase. It successfully uptrend transactions by over 54.7% in the past 2 months. The Total Value Locked also increased by 2%, close to $979 million.