Terra Continues to Make Gains as Users Flock to Layer 2 Networks

Layer 2 refers to a secondary framework or protocol that is built on top of an existing blockchain system. The main goal of these protocols is to solve the transaction speed and scaling difficulties that are being faced by the major cryptocurrency networks.

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In the last 7 days, as of this writing, Total Value Locked (TVL) on the Terra ecosystem has grown by 7.59% as Ethereum and most other networks saw declines in TVL.

In the latest data as tracked by DefiLlama, here are the 7-day TVL changes across the top networks:

  • Ethereum – 0.54%
  • Terra – 7.59%
  • BSC – 1.37%
  • Avalanche – 0.99%
  • Solana – 1.83%
  • Fantom – 27.73%

The Terra TVL currently stands at $24.81 billion and the Terra blockchain is doing the most in chipping away at Ethereum’s long-held dominance.

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SEE ALSO: Terra UST Stablecoin Hits $10 Billion Market Cap – Gains Over 12,000% in 2021 Alone

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Ethereum is marked in Yellow

In recent months, another trend saw Ethereum layer 2 sidechains – the likes of Phantom and Polygon, which were elucidated by a DappRadar Industry Report – continue to gain traction as well.

In the report, the Dapp tracking service observed that wallets connecting to Ethereum dapps fell from a high of more than 168,000 on February 20 to less than 94,000 on March 1 in a 10-day period.

According to DappRadar, this occurred as several layer 2 networks saw an increase in users and wallets connecting to them.

Some of the layer 2 networks that are chipping away at Ethereum, either by implementing bridges or sidechains, include:

  • Polygon (Matic)
  • Solana
  • Avalanche
  • Ronin
  • Fantom

Overall, over a two-day period between February 27- 28, 2022, the number of wallets connecting to these networks rose by 10%, while Ethereum saw a 20% decline in the same metric.

Layer 2 refers to a secondary framework or protocol that is built on top of an existing blockchain system. The main goal of these protocols is to solve the transaction speed and scaling difficulties that are being faced by the major cryptocurrency networks.

However, here is the latest data (March 12, 2022) for user wallets interacting with Ethereum and its layer 2 competition over the last 7 days:

  • Ethereum – 75.98 k
  • BSC – 486.71 k
  • Matic – 233.82 k
  • Ronin – 61.84 k
  • Avalanche – 45.29 k
  • Fantom – 28.11 k

In what is perhaps the key highlight of the drop on native Ethereum usage, is that the volume exchange has noticed a sharp decline over the last 24 hours going from a 30-day monthly high of $9.03 Trillion to 3.74 Trillion virtually overnight.

However, in the overall DeFi landscape, Terra remains the biggest gainer in recent months. The platform, whose $LUNA token has surpassed Ether to become the second most staked token, has gained an astronomical 75.25% in TVL over the last 30 days.

Terra thus stands out even despite the upheaval in the EVM world that have all shed their TVL in the last 30 days.

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RECOMMENDED READING: EXPLAINER GUIDE: How to Stake $LUNA and Earn Rewards on the Terra Ecosystem in 5 Easy Steps

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