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<h1>Layer 2s Will Increasingly Become Important</h1>

The idea of a layer 2 token started with Ethereum and sure it's had it's drama, ups and downs and so on but what market or even business has not?

Hives Layer2 is still rather small but it has expanded in the last bull run and held decently strong during the now one and a half year bear market which might be coming to an end btw.

There's a lot of smart people that trained and got onboarded in crypto two years ago and since then many found themselves laid off. What they did during that bear market however was started building their own visions and applications and that's starting to now come to light.

These new applications take time to develop but in that they spark what is the next evolution which should in theory at least spark a new bull run.

These cycles are common and happen in the stock market, business, self employed etc. So it should be no surprise that these cycles are now speeding up as tech continues to evolve helping more people achieve larger results faster.

### Ethereum Layer 2's

Ethereum has always been one of the center points for growing layer two tokens and user base. As much as some people hate on it including the fees it's the cream of the crop when it comes to people wanting to build applications on it. This is mainly because the market cap behind it is huge to the point where it can fuel all of these projects and then some.

From tracking records we can see that layer 2 applications including fees collected and transactions per day are on the rise since October of last year. 30% gains and in some cases over 100% gains in the last year are sparking what very well could be the next bull run.

The thing to note about a bull run is you don't realize you're in one until it's about to be over in a few months. What we are seeing over the last two weeks so far is exactly what a start of a bull run looks like.

![polygonchart.jpg](https://images.hive.blog/DQmepxcmeiCefLCembBQc1jWA8bCzVPtfpVjaxBfv6MFxSF/polygonchart.jpg)

The chart above shows daily active users on Polygon (Matic) and you can see that active users has remained strong but it's also increasing. It's actully a healthy blockchain.

### What About DeFi

I've been speculating that if DeFi can get their shiz figured out with all the hacks etc then DeFi is going to pave the way for the next bull run. It's now had a solid two years of build tech that should hopefully fix these issues or lessons learned to minimize them.

![lido.jpg](https://images.hive.blog/DQmUNGJnujEUefc7bdEDW8AJLCzS3uMHykQLBArhiMgCqMU/lido.jpg)

For the most part defi really hasn't moved. It still holds a healthy amount of crypto for liquidity but as we all know the last 6+ months has seen some serious issues with liquidity. It's why I almost feel like DeFi will be a lag effect of the bull market.

*Side note I'm actully surprised to see LIDO at the top. I've personally never heard of this before and after looking at the site it makes me question it a bit with the APR rates they are currently giving out. That for me is normally a big red flag.

Overall markets are looking healthy and while there will be interest rate hikes on the way I'm also starting to feel that investors don't trust bonds and governments as much any more. There seems to be a quick decline in people trusting treasury bills etc with everything currently going on and perhaps a world wide currency like crypto might very well be a better option now.

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