Ethereum and Layer 2 blockchains: Spectacular surge in on-chain activity in the first half of 2024

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Despite a stagnant price around $3250, far from the hoped-for $4000, Ethereum continues to shine in the cryptocurrency universe. The Ethereum blockchain is experiencing impressive growing onchain activity, particularly thanks to layer 2 blockchains. These latter, in full growth, are transforming the transaction ecosystem and attracting more and more users and investors.

A spectacular growth in onchain activity

Since the beginning of 2024, Ethereum and layer 2 blockchains (L2) have seen their onchain activity jump by 127%. This meteoric growth is explained by the increase in the number of users and transaction volumes.

According to a joint report by Coinbase Institutional and Glassnode, the average number of daily active addresses on Ethereum and L2 has seen an unprecedented increase.

The joint report by Coinbase and Glassnode – Source: Glassnode on X

Vitalik Buterin, co-founder of Ethereum, has described these L2 platforms as the “ultimate playground for action,” attracting not only individuals but also profit-hungry financial institutions.

These L2 blockchains, such as Linea, Base, and Arbitrum, have thus captured attention with 1.8 million active daily addresses. These solutions allow for low-cost transactions before transferring them to the main Ethereum blockchain for immutable recording, ensuring both efficiency and security.

The impact of the Ethereum Dencun upgrade

One of the main reasons for this increase in activity is the Ethereum Dencun upgrade, deployed in March 2024. This update significantly reduced transaction fees, dropping them by 58% in the second quarter despite an increase in the number of transactions.

This cost reduction has made Ethereum more accessible and attractive for users, thereby boosting onchain activity.

The variety of use cases, such as lending, staking and trading, has also played a crucial role in this dynamic.

The report’s authors predict continued adoption as existing applications mature and new innovative applications emerge.

This development is a clear sign of the rapid evolution of blockchain technology, which translates into increased adoption and the rise of Ethereum in the cryptocurrency field.

BlackRock and its ambitious bet on Ethereum

The investment giant BlackRock has recently strengthened its presence in the cryptocurrency market with the launch of new Ethereum (ETH) spot ETFs.

Despite regulatory hurdles and initial skepticism, these ETFs have garnered significant investor interest, demonstrating strong institutional confidence in Ethereum’s long-term potential. In just a few days, the iShares Ethereum Trust ETF (ETHA) accumulated 77,000 ETH, approximately $277 million.

This strategic move by BlackRock, which already holds a dominant position in the Bitcoin ETF market, underscores the evolving landscape of digital assets and the growing intersection between traditional finance and blockchain technology.

Nate Geraci, president of the ETF Store, stated that the integration of staking in Ethereum ETFs is a matter of “when, not if,” indicating a continued and positive evolution for the Ethereum ecosystem.

Nonetheless, Tron is positioning itself as a major competitor to Ethereum with its 81 billion transactions. As blockchains continue to develop and innovate, competition in the cryptocurrency space intensifies, promising exciting developments to come.