Transaction volume on the ethereum network fell to its lowest point since April 2021, as transactions on the blockchain and associated layer 2 protocols continue to drop.
Ethereum mainnet sees a significant drop in transactions
Yesterday, the number of transactions on ethereum’s primary network, known as the mainnet, fell to a level not seen since April of last year. Despite the fact that it was a holiday and there were other factors at play, such as off-chain transactions occurring on Layer 2 networks, the drop in on-chain activity was significant. Ethereum’s mainnet saw roughly 742,000 transactions yesterday.
Some speculate that it could be due to a decline in the use of decentralized finance (DeFi) protocols, as these often drive a significant amount of traffic on the ethereum network. Others believe it could be the result of a shift towards using alternative blockchain platforms for transactions.
Regardless of the reason, it is worth noting that the trend can have an impact on the ethereum network and the broader cryptocurrency market. Low levels of activity on the mainnet could potentially indicate a decrease in overall demand for the cryptocurrency.
Polygon network sees decline in transactions
Data also shows that transactions on ethereum layer 2 projects like polygon have seen a steep decline since last year. Yesterday, there were 2.6 million transactions on the polygon network, far from the blockchain’s peak of 9.1 million transactions on June.16, 2021.
In contrast to the downward trend of other L2 protocols, Optimistic Protocol (OP) is experiencing explosive growth and has been growing steadily as seen in the chart below.
The reason for this divergence in performance is not immediately clear. It is possible that the unique features of the Optimistic Protocol are resonating with users and driving adoption. Alternatively, it could be that the decline of other L2 protocols is causing users to flock to OP as a superior alternative.