Ethereum, as one of the leading blockchain platforms, has gained immense popularity for its ability to support decentralized applications (DApps) and smart contracts. However, the network has faced scalability challenges due to its limited transaction processing capacity. To address this issue, Ethereum Layer 2 (L2) solutions have emerged as a promising approach.

Ethereum Layer 2s are off-chain protocols or networks that operate alongside the Ethereum mainnet, aiming to increase scalability and reduce transaction costs. By leveraging Layer 2 solutions, users can conduct transactions and execute smart contracts more efficiently, without overwhelming the Ethereum mainnet.

USDC Effects on Ethereum Layer 2s and Avalanche: USDC, or USD Coin, is a popular stablecoin that operates on the Ethereum blockchain. It is an ERC-20 token pegged to the value of the US dollar and widely used in various decentralized finance (DeFi) applications. The integration of USDC has had significant effects on Ethereum Layer 2s and other blockchain platforms like Avalanche, both in terms of adoption and functionality.

1. Enhanced Scalability: The integration of USDC on Ethereum Layer 2s has improved the scalability of the network by reducing congestion on the Ethereum mainnet. By conducting transactions with USDC on Layer 2 solutions, users can enjoy faster and cheaper transactions, making it more feasible to use decentralized applications.

2. Increased Adoption: USDC's compatibility with Ethereum Layer 2s has attracted more users and developers to leverage these solutions. The ability to transact with a stablecoin like USDC eliminates the price volatility often associated with cryptocurrencies, making it more accessible and appealing to a broader user base.

3. Interoperability with Avalanche: Avalanche is another blockchain platform that has gained traction in the decentralized finance space. USDC's integration with Avalanche has facilitated cross-chain interoperability, allowing users to transfer USDC seamlessly between Ethereum Layer 2s and Avalanche. This interoperability expands the utility of USDC and enhances liquidity across multiple platforms.

4. Diversified DeFi Ecosystem: The integration of USDC on both Ethereum Layer 2s and Avalanche has contributed to the growth of the decentralized finance ecosystem. It has opened up new opportunities for developers to build innovative DeFi applications, enabling users to access various financial services, such as lending, borrowing, and decentralized exchanges, across multiple platforms.

In summary, the integration of USDC on Ethereum Layer 2s and Avalanche has played a significant role in improving scalability, driving adoption, promoting interoperability, and expanding the decentralized finance landscape. These developments have brought us closer to a more efficient and interconnected blockchain ecosystem.

The data provided by Flipside has been used to handle this analysis.

• In this investigation, first of all, the mint and burn volume of the USDC on various L2 chains have been investigated. Also, the holders of the USDC on various L2 chains have been determined.

  • Metrics-> Total mint and burn, Net supply, Average volume of mint and burn, Total holders, Average and median volume of held.

• The transfer analysis related to the USDC token on various L2 chains has been analyzed. Additionally, the transfers related to the mint and burn of USDC are excluded from the transfer investigation.

  • Metrics-> Total volume, Average and median volume of transfer, Average volume per block and senders, Monthly and cumulative transfer analysis.

• After transfer investigation, the adaptation of the USDC on the Avalanche and other L2 chains have been determined by various indicators. For this purpose, the popular sectors and projects for the application of the USDC have been underestimated.

  • Metrics-> The application of USDC on various sectors of L2 chains, Popular sectors on the Avalanche network, Most popular projects/programs for USDC utilization on the Avalanche.

• Finally, the trade analysis of USDC on the Avalanche has been underestimated from various points.

  • Metrics-> The sale and buy volume of USDC, Count of trades and unique traders, The tokens swapped from USDC and swapped to USDC, Most popular swap pairs based on volume of trade.