Over 41% of those transactions took place on Xai, a new Ethereum layer-3 scaling solution focused on gaming applications.

Ethereum Ecosystem Hits Record TPS with Layer-3 Scaling Solutions

The Ethereum ecosystem has reached a new milestone in terms of transactions per second (TPS), thanks to a significant increase in activity on a lesser-known Ethereum layer-3 scaling solution.

Key Highlights
- Record TPS: On June 16, Ethereum’s combined TPS across its scaling networks, including layer-2 and layer-3 solutions, hit an all-time high of 246.18 TPS, equivalent to approximately 21.2 million transactions for the day .
- Xai's Contribution: Over 41% of these transactions were attributed to Xai, a new layer-3 scaling solution designed for gaming applications. Xai is developed by Offchain Labs, the same team behind the Arbitrum One blockchain .
- Rapid Growth: Before June 10, Xai’s TPS was around one transaction per day. This figure surged dramatically, peaking at 101.72 TPS on June 16 .
- Top Performers: Besides Xai, other notable contributors to the high TPS were Base and Arbitrum, with 33 TPS and 21 TPS, respectively, on June 16 .

Detailed Breakdown
- Layer-2 and Layer-3 Integration: The surge in TPS is largely driven by the integration and adoption of both layer-2 and layer-3 scaling solutions. These solutions enhance Ethereum’s scalability by processing transactions off-chain and only settling on-chain, thus reducing congestion and fees.
- Total Value Locked (TVL): Despite the high transaction volume, the total value locked in Xai and Proof of Play Apex (another gaming-focused layer-3 solution by Offchain Labs) remains relatively small, with $1.38 million and $695,000, respectively. In contrast, Arbitrum One and Base have much larger TVLs, securing $18 billion and $7.6 billion, respectively .
- Gaming Focus: Xai and Proof of Play Apex, both focusing on gaming applications, indicate a growing trend of specialized layer-3 solutions targeting specific use cases, such as gaming, to improve user experience and transaction efficiency .

Industry Perspectives
- TPS Metric Criticism: While TPS is a commonly used metric to gauge blockchain performance, some industry experts argue it may not fully capture the effectiveness of a blockchain. Steven Goldfeder, a founder at Offchain Labs, likened it to counting the number of bills in a wallet without considering their denominations. Despite this criticism, TPS remains widely used due to the lack of a better alternative metric .

Implications and Future Outlook
- Scalability Enhancements: The record TPS achieved by Ethereum's layer-2 and layer-3 solutions demonstrates the significant progress in scalability. These advancements are crucial for supporting a wide range of applications, particularly in high-demand sectors like gaming.
- Adoption and Innovation: The success of specialized layer-3 solutions such as Xai underscores the potential for further innovation in the Ethereum ecosystem. As more projects adopt these solutions, Ethereum’s capacity to handle large volumes of transactions efficiently is likely to improve.
- Regulatory and Security Considerations: As the use of layer-3 solutions grows, it will be important for developers and regulators to address potential security and regulatory challenges to ensure the robustness and compliance of these systems.

By leveraging advanced scaling solutions, Ethereum continues to push the boundaries of blockchain technology, paving the way for broader adoption and more complex applications. The recent surge in TPS is a testament to the ongoing efforts to enhance the scalability and efficiency of the Ethereum network.