Ethereum Layer 2 TVL drops to $5 billion, the lowest level since 2023

PANews July 29 — According to The Block, the total value locked (TVL) on Ethereum Layer 2 networks has fallen to about $5 billion, the lowest level since 2023, almost erasing the growth brought by the launches of L2s in 2024 such as Optimism, Arbitrum, and ZKsync. Optimistic Rollups such as Optimism, Base, and Arbitrum still dominate TVL, totaling about $4.8 billion, accounting for 96% of the total.

The decline in TVL is happening in tandem with Ethereum’s own troubles — since the beginning of the year, the Ethereum Foundation has lost multiple senior leaders, including the co-executive director, and it has carried out layoffs. As traditional finance embraces Ethereum, it is also increasingly adopting other alternatives. For example, DTCC tokenized U.S. Treasury bills on top of $100 trillion in custodial assets, and JPMorgan deployed JPM Coin to multiple public chains. Stablecoins remain the exception: USDC and USDT are still mainly used for settlement on Ethereum and its L2s, which keeps Ethereum’s core position as a bridge between crypto and traditional finance.