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Glassnode's recent report highlights a 127% surge in daily active addresses for Ethereum and its layer-2 blockchains in the first half of 2024, driven by increased onchain activity.
127% Surge in Active Addresses
With blockchain networks such as Ethereum experiencing substantial growth in user base size and other metrics, onchain activity has been on the rise in 2024.
Ethereum and major layer-2 (L2) blockchains had a 127% spike in average daily active addresses in the first half of 2024, according to a recent Q3 research by Coinbase Institutional and Glassnode.
The research claims that early 2024 saw a surge in onchain activity on Ethereum and L2s, driven by significant increases on top L2s.
Layer 2 (L2) blockchains are built on top of Ethereum and its goal is to reduce fees and commissions for layer 1 (the Ethereum network) while increasing the speed of transaction processing.
L2s Reduce Fees and Speed Up Transactions
After validation on parallel blockchains, these L2 solutions allow for the processing of low-cost transactions. Records are then transmitted to the main blockchain to ensure immutable recordkeeping.
The top three L2s as of this writing are Linea, Base, and Arbitrum, with a total of 1.8 million daily active addresses, according to data from the Ethereum analytics site Growthepie.
Vitalik Buterin, co-founder of Ethereum, stated in May 2024 that Ethereum L2s had become "the ultimate playing field for action" due to profit-driven institutional entities and individuals buying assets such as non-fungible tokens (NFTs).
According to Coinbase and Growthepie, user growth on L2 blockchains has surpassed that on Ethereum by a large margin, despite the rapid creation of new, quicker, and cheaper L2s.
The research states that in Q2 2024, there was a 59% increase in the number of transactions involving Ethereum and L2s, with the majority of this growth happening on L2s.
"The move onchain is driven by a variety of use cases, from lending to staking to trading, and we expect to see adoption grow as existing use cases mature and innovative new ones take hold," the study's authors concluded.
59% Increase in Q2 Transactions
Cointelegraph elaborates that even though there was a 59% increase in the number of transactions in Q2 2024, the total transaction fees on Ethereum decreased by 58%. The Dencun upgrade to Ethereum in March 2024 drastically cut transaction fees, which led to a decrease in network fees.
The research states that in Q2 2024, Ethereum saw a significant increase in onchain activity, while Bitcoin saw a decrease in activity from crypto users.
According to the report, there was a 20% decline in the average number of daily active Bitcoin addresses in Q2 2024, and a 16% decline in the average number of daily active businesses.
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