The Ethereum ecosystem has experienced significant growth, with its L2 TVL reaching an all-time high of $47 billion. This surge can be attributed to the SEC's approval of spot ETH ETFs, which has fueled a bullish rally in the crypto sector. The Ethereum L2 TVL has seen a remarkable increase of 15.68% in the past seven days, according to L2 Beat data. Notably, in May 2023, Ethereum L2 TVL stood at $11 billion, and by December 31st, it had modestly risen to $22.55 billion. In early April 2024, it experienced a significant surge, hitting $45.52 billion, but briefly dipped to $37.51 billion before recovering.

Arbitrum One leads the L2 chains with a TVL of $19.27 billion, followed by OP Mainnet and Base, with total values locked at $7.83 billion and $6.94 billion, respectively. Other notable contributors include Blast, with a TVL of 3.36 billion, and Polygon zkEVM, the 15th largest contributor, with a TVL of $167.36 million. The Ethereum ecosystem has witnessed multiple advancements in the past week, including the launch of the L2 Scaling solution, Taiko, and Vitalik Buterin's announcement of working on Ethereum's MEV issue and plans to decentralize Ethereum further. The Ethereum core developers have set Q1 2025 as the target for the Pectra upgrade.

The SEC's approval of spot ETH ETFs on May 23 has been a significant factor in the recent boost in the Ethereum network. Additionally, the Ethereum price has surged by 2.69% in the past 24 hours, trading at $3910 according to CMC data. The Ethereum ecosystem has seen a remarkable surge in network activity, with a 72.45% increase in token transfers and a 3.58% rise in active addresses. Open interest in Ethereum has also surged to $13.17 billion, representing a 6.84% intraday increase and a staggering 51.06% rise over the last seven days. The bullish momentum in the Ethereum price trend is gaining traction, with an impressive 25% surge last week, propelling the cryptocurrency to the $3,900 level. As speculation mounts about the impending altseason, the ETH price is on the cusp of breaking through the crucial $4,000 resistance this week.

Ethereum's scaling issue has long been a topic of discussion in the crypto realm. The pioneering smart contract blockchain is notorious for high gas fees due to its limited throughput during periods of high activity. One of the main reasons behind the limited scalability is the sequential nature of Ethereum's runtime environment, the Ethereum Virtual Machine (EVM). The EVM is designed to operate as a Turing-complete virtual machine, enabling the secure execution of smart contracts on the Ethereum blockchain. While this runtime environment has been efficient and reliable, it processes transactions sequentially, leading to longer waiting times and higher gas costs, especially during high-volume activity.

Several initiatives have been launched to solve Ethereum's scalability challenge, including alternative Layer 1 chains such as Solana and Layer rollups like Arbitrum and Optimism. While these scalability solutions have played a notable role in enhancing the transaction throughput, a more novel scaling solution is currently gaining attention in the DeFi community: parallel EVM chains such as Sui, Meter, and Nomad. These parallel EVM chains introduce DApp building ecosystems that can process multiple smart contract transactions simultaneously, reducing waiting times and gas costs.

The Sui blockchain ecosystem, with a total value locked (TVL) of $751 million, is designed as a Parallel EVM chain, leveraging the state access method. Notably, this smart contract network also features an object-centric data model to enhance the clarity in the proactive ordering of independent and dependent transactions. As of writing, there are over 25 DApps building on the Sui blockchain ecosystem, most of which are Dexes and yield platforms. Meter, another EVM-compatible chain, has already integrated parallel transaction submission on its mainnet and is developing a crypto-optimized database to enhance I/O performance. Monad, leveraging optimistic parallelism, claims to support over 10,000 transactions per second and prioritizes user simplicity.

The DApp ecosystem has grown significantly over the past four years, and it's clear that mass adoption cannot occur until scalability issues are resolved. While some DeFi enthusiasts might advocate for migrating to cheaper DApp ecosystems, the reality is that Ethereum remains the most prominent smart contract blockchain, holding over 50% of the total value locked (TVL) according to DeFi Llama. Therefore, it makes more logical sense to develop scaling solutions that enhance Ethereum's core functionalities or address multiple challenges simultaneously, such as EVM compatibility and parallel transaction processing.