Ethereum and Its Layer-2 Blockchains See 127% Surge in Active Addresses in H1 2024

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.

onchain activity in the first half of 2024.

With blockchain networks like Ethereum experiencing substantial growth in user base size and other metrics, onchain activity has been on the rise in 2024.

According to a recent Q3 research by Coinbase Institutional and Glassnode, Ethereum and major layer-2 (L2) blockchains had a 127% spike in average daily active addresses in the first half of 2024.

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.

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.

Co-founder of Ethereum Vitalik Buterin 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 like non-fungible tokens (NFTs).

According to Coinbase and Growthepie, user growth on L2 blockchains has outpaced that on Ethereum by a large margin, despite the rapid creation of new, quicker, and cheaper L2s.

In Q2 2024, there was a 59% increase in the number of transactions involving Ethereum and L2s, with the majority of this growth occuring on L2s, the research states.

"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.

Even though there was a 59% increase in the number of transactions in Q2 2024, the total transaction fees on Ethereum decreased by 58%, Cointelegraph elaborates.

With the Dencun upgrade in March 2024, Ethereum 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.