L2 TVL Declines as L1s Steal the ShowDec 22, 2021
L2’s are losing market share to L1’s in recent months, despite the migration of DeFi protocols from Ethereum. Most expected L2s to immediately become a hot-spot for developers and users who were priced out of Ethereum mainnet. But to the detriment of Ethereum, other L1s stole the limelight. Ecosystems like Polygon and Avalanche that dedicated a portion of their token treasuries to user incentives were key to making this happen.
Notable TVL deterrents include absent L2 native tokens, increasing gas costs on mainnet Ethereum, and reduced farming emissions.