The Lightning Network has seen a more than 1,200% increase in its utilization in two years. The number of transactions on the network exceeded 6.6 million in August 2023.
According to a report by the cryptocurrency exchange River, the popularity of Bitcoin’s Layer 2 protocol Lightning Network has grown significantly over the past two years. So, despite the decline in quotations of the first cryptocurrency, the number of transactions within the L2 network has grown by 1,212%.
On-chain analytics show that in August 2021, Lightning Network users made about 500,000 transactions, while this figure exceeded 6.6 million in August 2023. River analysts could only estimate routed transactions, i.e., those that use more than two nodes to facilitate the transfer, so the real figure could be much higher as it’s impossible to estimate transactions between only two participants.
As for the estimated value of Bitcoin transactions within the L2 network, it has also shown a substantial increase in two years, from $12.1 million in August 2021 to $78.2 million in August 2023. Thus, the Lightning Network currently processes 47% of all transactions on the Bitcoin network.
River reports that the average Lightning Network transaction size was about 44,700 satoshis ($11.84) in August 2023. In September this year, the number of active users of the L2 network reached a record 1.1 million.
Among the main growth drivers for the number of transactions, River analysts highlighted the following:
- The GameFi sector, which accounts for about 27% of all transactions on the Lightning Network. The number of transactions grew by 226%.
- Micropayments. Transfers of less than 110 satoshis account for about 25% of the total number of transactions on the network.
- Social networks generate a considerable amount of transactions on the L2 protocol network. Thus, only Nostr accounts for about 2.5% of the volume of monthly network transactions.
Hype around the NFT protocol Ordinals provoked a dramatic jump in the number of transactions on Bitcoin, so Lightning Network developers introduced an update Taproot Assets v0.2, which partially reduced the network load. It also became known that the developers plan to combine the capabilities of the Lightning Network and artificial intelligence (AI).
