ARK Scaling Blockchains Research | 2025 Mid-Year Review

Layer 2 Scaling Solutions - Ethereum layer 2 solutions have reduced transaction costs by 10-20x, leading to over 85% of Ethereum transactions occurring on these cheaper layer 2s [2][3] - Base, incubated by Coinbase, dominates layer 2 activity, accounting for over 50% of active users, transactions, and revenue [6] - Competition in the layer 2 space is increasing with Kraken announcing INC, Robinhood launching its own layer 2 on the Arbitrum stack, and Securityize partnering with Athena to launch Converge [6][7] - Worldcoin is also building its layer 2 on the Optimism stack [8] Decentralized Applications (dApps) and Exchanges (DEXs) - Spot volume of decentralized applications has more than doubled, approaching 20% of the market share compared to centralized counterparts [9] - Decentralized exchanges are 5-10x more efficient than centralized exchanges, achieving similar volume with significantly fewer employees [11] - Decentralized exchange volume has continued to increase, reaching 25-30% of centralized exchange volume [12] Solana's Performance and Developer Activity - Solana has experienced a significant turnaround, achieving 4-5x greater transaction throughput than Ethereum and its layer 2s combined, reaching almost 800 TPS [14] - Solana has surpassed Ethereum in attracting net new crypto developers [15] - Solana is focused on improving its base layer with upgrades like Fire Dancer and Alpenlow [19]