---
title: "Economics in the Sometimes Strange World of Web3"
description: "Explore how Layer 2 blockchain solutions are driving 97% cost savings and 67% of Ethereum transactions, reshaping web3 economics and startup opportunities."
categories: ["web3","financials"]
keywords: ["Layer 2 blockchain","Ethereum transactions","Arbitrum","Optimism","web3 economics","venture capital","blockchain technology","startup opportunities","Tomasz Tunguz"]
ai_summary: "Discover how Layer 2 solutions are transforming web3 economics and driving significant cost savings in Ethereum transactions."
date: 2023-04-09
lastmod: 2026-07-30
canonical_url: https://www.tomtunguz.com/l2s-l1s-marketshare-q2-23/
author: "Tomasz Tunguz"
---

Blockchains are databases application developers use to build [novel user experiences](https://tomtunguz/the-most-successful-web3-launch-in-2022/). Just as hundreds of different databases exist in web2, different blockchains have evolved in web3.

In September, I published the State of [Web3 in Data](https://tomtunguz.com/state-of-crypto-2022-dunecon/). I've been watching one of those charts very closely : slide 25 which tracked L2s & L1s.

Layer 2s (or L2s) like Arbitrum & Optimism, sit atop Ethereum (an L1). They provide faster & less expensive transactions for application developers. 

The average Ethereum transaction costs about $2.60 as of this writing, whereas on [Arbitrum it costs $0.07](https://dune.com/queries/1062787/1825781), a 97% savings. 

For an individual transaction, the difference may not matter, but for application developers & frequent traders, those dollars accumulate over time.  In the long-term, lower prices will drive more activity, essential for broader adoption of web3 technologies. 


![image](https://res.cloudinary.com/dzawgnnlr/image/upload/v1681092291/igyndtnjratsjh1uyddl.png)


In September, L2s processed about 30% of Ethereum transactions. Six months later, that figure is 67% according to [Dune](https://dune.com/queries/2349088). Within the Ethereum ecosystem, this number should asymptote to 90-95%.   

Economics works - even in the sometimes strange world of web3.  

As web3 evolves, we will see more instances of economics driving behavior : 
- the evolution of [token drops to more efficient marketing strategies](https://tomtunguz.com/uniswap-airdrop-analysis/) because [airdrops are uneconomical compared to classic venture rounds.](https://tomtunguz.com/tokens-as-cac/) 
- developers choosing particular blockchains for applications based on workload including more expensive, more secure databases called zero-knowledge (zk) in web3 or less expensive faster databases like L2s
- revenue as a core driver of valuation in web3 startups & publics