Despite market turmoil, layer 2 solutions in the crypto sector have been improving.
Optimism is one of the L2 solutions that has showed remarkable promise. Transactions on Optimism have increased significantly in recent days, according to Dune Analytics.
The quantity of ERC-20 transactions on the platform has been one of the platform’s primary areas of growth. ERC-20 is a commonly used standard in the cryptocurrency industry for issuing tokens on the Ethereum network.
The increase of ERC-20 transactions on Optimism indicates that more users are flocking to the platform to lower transaction fees.
This increase in Optimism transactions could also indicate that it is beginning to challenge Polygon’s supremacy in the L2 area.
At the time of writing, Optimism had approximately 1.7 billion transactions, whereas Polygon had approximately 2.4 billion.
Although Polygon remains ahead, the difference between these two values has narrowed over time, which could indicate that Optimism is catching up.
However, in terms of user market share, Polygon maintained its supremacy, accounting for 67.9% of the total market share. This meant that, while Optimism’s transactions were increasing, it was still not drawing as many users as Polygon.
Furthermore, the amount of Ethereum saved by individuals who choose Optimism fell. This could have an effect on the amount of people using the Optimism protocol. Users may choose various Layer 2 solutions that provide more scalability or reduced expenses.
Optimism’s Quests NFTs, on the other hand, may draw additional users to the system. As NFTs become more popular in the crypto market, the number of daily users and NFTs created on Optimism has increased.
However, the crypto market was not as interested in Optimism’s token.
In reality, network growth has slowed in OP. The number of times OP was transferred for the first time among new addresses indicates this.
Furthermore, the token’s activity has decreased. This was demonstrated by the token’s diminishing daily active addresses and dropping velocity. A decreasing velocity indicated that the frequency at which OP was exchanged among addresses was decreasing.
Finally, Optimism’s increase in ERC-20 transactions and NFTs could indicate that it is beginning to challenge Polygon’s dominance in the L2 space. However, it still has a long way to go before it can claim to be the market’s leading L2 solution.
