The bullish narrative built around Layer 2 tokens, as users get paid Ethereum (CRYPTO: ETH) mainnet, did not materialize this year, according to Delphi Digital.
What happened: Instead, tokens that have dedicated a portion of their cash to entice users such as Polygon (CRYPTO: MATIC) and avalanche (CRYPTO: AVAX) had lunch on L2 projects like Loop and Arbitrator, said the firm in a note.
TVL in Top 5 Greatest Layers 2 – Courtesy of Delphi Digital
The independent research firm noted disincentives such as the lack of native L2 tokens, rising gas costs on the Ethereum network, and reduced agricultural emissions as the decline in the total L2 value is locked in. .
“The L1s have been the central narrative for most of this year. As the scale wars escalate, it doesn’t look like this trend is ending anytime soon, ”wrote Delphi Digital.
The company said “market confidence” drove the price of L1 channels to record highs towards the end of 2021.
Delphi Digital pointed out that the two Earth (CRYPTO: LUNA) and AVAX adoption has “increased significantly” during the year.
Number of portfolios on Terra and Avalanche with LUNA, AVAX price – Courtesy of Delphi Digital
“Since July 1, the number of addresses interacting with Avalanche has increased by approximately 22 times, while addresses using Terra have increased by 22%,” noted Delphi Digital.
While Avalanche is a newer chain and “is bound to have a steeper growth curve,” that doesn’t diminish the growth the network has experienced this year, according to the research store.
See also: How to buy Terra (LUNA)
Why is this important: LUNA has climbed 13,299% so far this year, while AVAX has climbed 3,189% in the same time frame. Since the start of the year, the price of MATIC has climbed 14,292%. In comparison, ETH rose 439.72% in 2021.
At the time of going to press, on a 24-hour basis, LUNA was down 5.2% to $ 87.37, while AVAX was trading down 2.5% to $ 122.62. MATIC rose 7.7% to $ 2.66. ETH traded down 2.2% to $ 3,969.47.
MATIC and LUNA hit new historic highs on Wednesday. MATIC hit a new high of $ 2.70, while LUNA hit $ 97.88.
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