In his post A-rollup-centric Ethereum roadmap, Vitalik states “the Ethereum ecosystem is likely to be all-in on rollups (plus some plasma and channels) as a scaling strategy for the near and mid-term future.” Almost a year later, we are witnessing this vision come to life, as seen in the chart below.

Existing L2 technologies can be grouped under 4 broad categories; Rollups, Validium, Plasma & Channels. While the intricacies of their various designs are beyond the scope of this report, we think it’s important to at least highlight their different use cases at the moment. This may change with time (e.g. StarkNet) but most of the existing L2 solutions serve app-specific purposes. For example –

Loopring & DyDx are L2 DEXs

Aztec is best suited for privacy

Sorare & ImmutableX are NFT exchanges

Connext functions as a p2p liquidity bridge across chains

In contrast to this, Optimism and Arbitrum, two Optimistic Rollup implementations, are designed to be general-purpose. In that sense, they offer similar functionality to L1 Ethereum. Importantly, these Rollups inherent the underlying security assurances of Ethereum. They do not rely on their own consensus mechanisms for security, like a sidechain would.

With this context in mind, let’s take a look at the historical liquidity across Rollups to date. While Optimism has been operational since the beginning of the year, TVL on the Rollup has been purposely limited as it gets off the ground. The focus has been on onboarding a few prominent ap