Ethereum\u2019s Layer 2s are enjoying widespread usage from users after last year\u2019s Merge<\/a>, according to a report<\/a> by P2P lending protocol PWN.<\/p>\n Led by Arbitrum<\/a> and Optimism<\/a>, which witnessed a 190% and 103% surge in network fees, respectively, the overall Layer 2 ecosystem saw fees increase 400% from 2022 to 2023.<\/p>\n Along with soaring fees on Layer 2s come reduced costs for users on Ethereum\u2019s mainnet, PWN reports. The network witnessed a 44% decline in generated fees, more than double the average for all Layer 1s.<\/p>\n <\/p>\n It seems users are migrating in droves to Layer 2 solutions, with the move to Proof-of-Stake accelerating the transition.<\/p>\n Bitcoin<\/a>, turbocharged by the Ordinals ecosystem, registered the highest growth among Layer 1s with a 461% surge in fees generated.<\/p>\n Decentralized exchanges suffered a 51% drop in total fees generated last year. Led by Uniswap<\/a>, which commands 64% of the entire fee market, the DEX sector generated $871M in 2023.<\/p>\n Despite suffering a threatening hack in late November, KyberSwap was the only DEX that saw growth in its fee market, jumping 73%.<\/p>\n Lending platforms highlight a mixed bag in terms of the concentration of value and fees generated. The entire sector saw fees decline 36%, with market leader Aave<\/a> mirroring that number. However, half the category dropped \u2013 with some, such as Maple Finance, dropping 99% \u2013 whereas the other 50% increased. Radiant was the top performer, generating 479% more fees over 2022.<\/p>\n The NFT marketplace sector was hit hard by last year\u2019s grueling crypto winter. Fees plummeted by 87% despite Blur\u2019s meteoric 2,718% rise.<\/p>\nDeFi and NFTs Take A Dive<\/h2>\n
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