In the last 2 years, we have witnessed the rise of so many Layer 2 blockchain solutions, all with unique technologies built upon and different solutions they proffer. Some notable mentions are Base, Dymension, Blast, Linea, Starknet, Metis, Manta, zkSync, Sui, Aptos, etc. The list is endless.

Many of these chains have distinct competitive advantages, and many of them are a net positive to the DeFi ecosystem. Layer 2 chains provide a breadth of opportunities for builders to build applications that people want to use. Builders have plenty of options on where they want to go, and so do users! In many ways, this is a good “problem” to have. It’s certainly better than having too few - not having alternatives to Ethereum’s expensive settlement layer would cost users a lot of money.

The above visual shows the number of unique addresses that interacted with one or multiple layer 2 chains in any given week. You can see the growth spurt this data has had in 2024 when compared to the numbers produced in 2022. This pattern is indicative of growing trends among L2s which attract new users.

For us to take advantage of these new chains - the new applications, the points programs, the user incentives, mainnet launches and TGEs - we have to be more attentive.

Here’s something interesting: Arbitrum, one of the older layer 2 blockchains, had the highest Net Flow (flows coming in - flows going out) out of any chain combined over the last 7 days.

OG Layer 2 chains don’t get as much hype on Crypto Twitter as many of the new chains, but their activity is surprisingly resilient and, oftentimes their prices seem to be holding up much better than chains with recent TGEs. According to L2Beat, Arbitrum and Optimism are still the top 2 Ethereum Layer 2s by assets deposited.

Most token prices have performed rather unimpressively as of late, largely due to the downturn experienced by the market, but in crypto that can change in an instant. A helpful tip is to find which chains are growing in activity and spend time there to capitalize on the opportunities within the ecosystems before the rest of the herd. Some metrics that are important to track when assessing Layer 2s are

1. Total deposits

2. DeFi TVL

3. DEX volume

4. Stablecoins

How To Take Advantage

1. Use analytical tools like Defillama to keep an eye on net flows every week. This will allow you to see where the liquidity is flowing. You must then find out why money is flowing to the chain - a new DEX or a new chain incentive for users etc.

2. Settle on a niche: what picks your interest? Retroactive farming of OG L2s like Optimism and Arbitrum or do you enjoy digging into new chains like Base and Blast?

These aren't steps mind you, they are tips that will guide you to gems earlier than others. Newer chains will come out and this will be so helpful in spotting the right ones early and engaging them for possible future airdrops.