According to a framework proposed by Ethereum co-founder Vitalik Buterin, Starknet has now reached “Stage 1” decentralization, marking a shift to limited governance and operational independence.

And the timing couldn’t be better — Starknet has also emerged as the largest ZK-rollup-based layer-2 network by total value locked (TVL).

Starknet Leads ZK-Rollups With $629 Million TVL

With a TVL of $629 million, Starknet now outpaces close competitor ZKsync, which holds $610 million, as reported by L2Beat. This positions Starknet at the forefront of ZK-rollup technologies in terms of locked value, making it a benchmark among zero-knowledge scaling solutions.

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The project’s advancement to “Stage 1” decentralization was supported by technical measures like the implementation of a security council and censorship resistance mechanisms. Starknet has also adopted validity proofs, allowing cryptographic verification of all transactions via smart contracts — a core difference from the fraud-proof model used by Optimistic rollups.

Stage 2 In Sight, With Eyes On Bitcoin

StarkWare CEO Eli Ben-Sasson stated that the long-term vision is to reach “Stage 2” decentralization, where the network will be fully autonomous and community-driven. Only a few small layer-2 networks have achieved this so far.

Interestingly, Ben-Sasson also mentioned that Starknet’s ambitions extend to Bitcoin, suggesting parallel development on the world’s largest blockchain.

Currently, the entire layer-2 ecosystem holds around $44.2 billion in value, though it remains down 20% year-to-date. Base, Coinbase’s Optimistic rollup, leads the sector with $14.7 billion in locked assets, accounting for a 33% market share.

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Elena Sinelnikova, co-founder of Metis L2, recently told Cointelegraph that Layer-2 scaling solutions should adopt decentralized sequencers to maximize anti-fragility and censorship resistance.

According to Sinelnikova, most L2 networks feature only a single sequencer, and many users are unaware that they are transacting on centrally managed platforms that could be controlled or shut down at any time. Sinelnikova stated:

“Approximately 97% of all Ethereum transactions occur on Layer-2s — so basically almost all of them. Layer-2 solutions were never meant to be decentralized. They are centralized solutions with one sequencer.”

Sinelnikova also addressed the Ethereum Foundation’s proposals to enhance decentralization by promoting L2 interoperability as an alternative to the current model of siloed and competing L2 solutions. However, the Metis co-founder argued that adopting decentralized sequencers is a simpler and more effective option.

Ethereum Layer-2 Networks Continue to Grow

Sinelnikova expects the number of Layer-2 scaling solutions to continue growing in 2025, and recent developments in the Ethereum L2 ecosystem support this expectation.

In October 2024, Ethereum co-founder Vitalik Buterin outlined plans to increase throughput to 100,000 transactions per second (TPS). This ambitious goal is part of Ethereum’s roadmap known as “The Surge”, which seeks to achieve 100,000 TPS between Ethereum’s base layer and its Layer-2 networks.

Layer-2 networks processed three times as much daily transaction data in November 2024 compared to March 2024. This increased activity led to a surge in fees on Ethereum’s base layer, helping reverse several months of low Ethereum revenues.

Total Value Locked in Ethereum L2s

According to L2Beat data, Ethereum L2s recorded $51.5 billion in total value locked in November 2024, experiencing 205% year-over-year growth. This figure swelled to over $60 billion in early December 2024, with Arbitrum One and Base leading with $21.5 billion and $14.2 billion, respectively.

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This achievement highlights how far Base has come since January when it averaged only 4 TPS. Base’s founder, Jesse Pollak, emphasized that TPS has increased by 28% since November 23.

According to L2BEAT data, Base now holds $10.68 billion in TVL, ranking second among Ethereum layer-2 solutions. It trails only Arbitrum One, which has $18.3 billion in TVL. Base secured this position in June after overtaking OP Mainnet.

The total TVL across Ethereum layer-2 networks currently stands at $49.3 billion.

Base has also reached a significant milestone in transaction volume. The network surpassed 1 billion transactions, driven largely by the memecoin frenzy during this bull cycle. However, the surge in memecoin activity has also attracted scammers. Between January and March, losses from phishing attacks on the network increased 18-fold.

While addressing these challenges, Base is making strides toward decentralization. In October, the implementation of fault proofs marked an important step in making the network more decentralized.

Base’s rise is seen as a challenge to fast blockchain solutions like Solana. StarkWare CEO Eli Ben Sasson noted that solutions like Base will increase competition, predicting significant TPS improvements in the coming months.

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