The Ethereum ecosystem has recently seen an unprecedented increase in transactions per second (TPS). According to L2beat data, on June 16, Ethereum’s scale networks, including both layer-2 (L2) and layer-3 (L3) solutions, achieved a combined 245.87 TPS. This figure translates to approximately 21.2 million transactions in a single day.
Interestingly, this boom was driven by the achievements of Xai, a new Ethereum L3 solution.
Xai’s rise signals a new era in Ethereum scalability
Xai is an L3 solution powered by Offchain Labs, the creators of the Arbitrum One blockchain. This protocol focuses on gaming applications.
Since June 12th, Xai has seen a meteoric rise in TPS, from just one transaction per day to an impressive 101.72 TPS on June 16th. Xai’s recent performance also set new standards for the highest daily TPS among L2 and L3 solutions in the Ethereum network.
Read more: A Beginner’s Guide to Layer-2 Scale Solutions
In addition, Xai surpassed Degen Chain’s April record for the highest TPS rate within the ecosystem. After Xai, Base is second with 32.97 TPS, and Arbitrum came in third, with 20.65 TPS as of June 16.
Despite the impressive TPS numbers, the total value locked (TVL) in Xai remains modest at $1.33 million. This figure contrasts sharply with Arbitrum One and Base, which hold $17.78 billion and $7.54 billion, respectively.
Xai’s new achievement highlights the important role of L3 solutions in improving Ethereum’s scalability. The rise of L3 technologies has sparked discussions about them being a critical component in blockchain technology infrastructure. Many believe that L3 can improve the scalability and efficiency of blockchain networks and facilitate the creation of new decentralized applications (Dapps).
L3 technology represents a groundbreaking step beyond the existing layer-1 (L1) and L2 solutions. L1, the blockchain base layer like Ethereum, provides fundamental security and decentralization.
Meanwhile, L2 works on top of L1 to improve scalability. On the other hand, L3 aims to further scale blockchain networks by anchoring them in L2 for security. This offers potentially exponential scalability benefits.
In his 2022 blog post, Vitalik Buterin, the co-founder of Ethereum, discussed the potential of L3 technologies. He explained that L2 is primarily for scale, while L3 is for custom functionality such as privacy.
“In this vision, there is no attempt to provide ‘scalability squared’; rather, there is one layer of the stack that helps applications scale, and then separate layers for custom functionality needs of different use cases,” Buterin wrote.
Buterin elaborated that L3, which is for custom scale, can come in different forms. He pointed out specialized applications that use something other than the EVM (Ethereum Virtual Machine) for their calculation or rollups that are optimized for specific data formats, for example. He also mentioned the potential of validiums, systems that use SNARKs for computer authentication but rely on trusted third parties for data availability, as a viable L3 solution.
However, some industry experts criticize the discourse surrounding L3, including Marc Boiron, CEO of Polygon Labs, the company behind the L2 project Polygon. Boiron argues that L3 can siphon value from Ethereum’s ecosystem to the L2s they build on.
Read more: What is Validium and how does it make Ethereum more scalable?
Despite differing viewpoints, the discussion surrounding L3 and its potential remains one of the most fascinating topics in the decentralized finance (DeFi) industry. As L3 is still in its early stages, its effectiveness and impact have yet to be fully realized. The industry will be watching closely how L3 solutions like Xai evolve and shape the future of Dapps and scalability.
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