Ethereum Layer-2 Token Prices Up Double Digits This Year

A flurry of trader activity and speculation of layer-2 projects have seen their associated tokens posting gains to start the year

article-image

Source: Shutterstock / ParabolStudio, modified by Blockworks

share

A handful of Ethereum-based layer-2 projects have been on a tear in the past week, with some of the sector’s associated token prices now up considerably in year-to-date (YTD) terms.

Traders are now speculating on a March launch of the next major Ethereum upgrade, dubbed Shanghai, which would enable the withdrawal of staked ether from validators, a planned change that has been anticipated move from industry participants since the Merge.

“Volatility has been at its lowest in the crypto market in the past weeks,” David Cicoria, head of quantitative development at crypto custodian Hex Trust, told Blockworks. “This coupled with the announcement of lower interest rates, Ethereum’s upcoming Shanghai upgrade, and FOMO from some investors has pushed prices up for layer-2 tokens.”

As such, several projects built around Ethereum are posting double-digit gains including the open protocol — aimed at decentralized exchange order books — Loopring whose token, LRC, is up more than 18% YTD.

Optimism, an EVM-compatible optimistic rollup chain that batch transactions before settling to Ethereum’s mainnet, has seen its OP token rise more than 25% over the same period. Daily transactions for the network hit an all-time high on Monday, etching just below 700,000.

Rival optimistic rollup Arbitrum’s daily transaction count has been ranging between 200,000 and 400,000, per data from Nansen.

Ethereum liquid staking solution Lido DAO’s token, LDO, is also up an eye-watering 80% since the new year and has continued to post considerable gains in the past week, clocking a 65% gain when viewed over a seven-day period. The project now stands as a top contender for total value locked at $6.5 billion, DeFiLlama data show.

And layer-2 scaling solution designed for NFTs using zero-knowledge rollup (zk-rollup) technology, Immutable X, is flashing 23% gains on its token since the new year began. 

The sector seeks to increase the value of Ethereum and related networks by reducing fees, improving scalability and bolstering transaction throughput — often a gripe levied at blockchain infrastructure that optimizes for security and decentralization.

It comes as digital assets have continued to struggle under the weight of an industry-wide blowout courtesy of FTX in the fourth quarter of 2022, as well as recent questions hanging over Digital Currency Group and its subsidiaries.

The spot market for most digital assets also experienced a brief reprieve on Monday, sending the price of bitcoin higher on the day, establishing itself above the pivotal $17,000 level.

None of this impresses Bitcoin maximalists like Samson Mow, Founder and CEO of Pixelmatic, who instead anticipate a market rebound to finally take shape courtesy of bitcoin’s next halving event.

“Ethereum and its layer two tokens are created and tweaked to bring hype and price movement to satiate high-time preference speculators,” Mow told Blockworks. “None of it is very interesting to Bitcoiners.”

Cicoria also remains skeptical of the latest upturn: “The crypto market remains fragile, with a lot of unknowns still to consider.”


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

recent research

Blinks Report Image.png

Research

Blinks enable the ability to vampire attack user monetization of existing networks by inserting onchain and financialized functionalities directly within the popular social feeds and digital experiences of today.

article-image

I was excited about being on the precipice of realigning societal incentives and solving many issues plaguing our modern financial world

article-image

Cypherpunk Holdings has rebranded to Sol Strategies in a pivot to a Solana-first investment approach

article-image

BitGo’s wrapped bitcoin (wBTC) has a new custodial challenger

article-image

Make no mistake: Tether makes a ton of money. But exactly how much depends a lot on the price of bitcoin.

article-image

A new report on stablecoin activity in emerging markets shows their immense popularity in Nigeria

article-image

Version 2.0 brings users closer to a “Coinbase experience”