In 2023, crypto developers created the most Ethereum Virtual Machine (EVM)-compatible smart contracts that operate on layer 2 scaling solutions, according to a report published Wednesday by blockchain infrastructure firm Alchemy.

The EVM, a software environment where all Ethereum accounts and smart contracts live, enables blockchains to interact with the Ethereum network, improving interoperability in the crypto ecosystem.

Read More: What Is EVM Compatibility?

Last year, builders deployed roughly 255 million EVM L2 contracts, defined as smart contracts created by an Ethereum address on a layer 2 blockchain network. This is a 303% increase year-over-year, highlighting how “the rollup-centric roadmap came to fruition,” the report stated.

In the “Web3 Development Report,” Alchemy noted that Polygon created the most EVM L2 contracts, accounting for about 62% of the total, outpacing Arbitrum and Optimism. 

The number of EVM L2 smart contracts created each year since 2019. (Alchemy)

While crypto venture capital firm Electric Capital indicated in a separate report that there was a 25% decline in active crypto developers in 2023, the number of software developer kits for the Ethereum blockchain saw a 31% year-over-year increase to 106.4 million downloads last year. 

The progress each project has made on building developer tooling and frameworks like Optimism’s SuperChain, Arbitrum’s Orbit, and Polygon’s CDK show “really serious advances that are setting up and we’re already seeing the conditions for an incredible proliferation of L2 and L3 chains,” said Alchemy’s protocol specialist Jason Windawi in an interview with Unchained. 

Layer 2 rollups are built atop of Ethereum, while layer 3 chains are developed on layer 2 blockchain networks. 

“We’re seeing the validation and the arrival of the rollup-centric roadmap for Ethereum and for the EVM ecosystem in general,” Windawi added. “This is confirmation of the fact that, yes, not only are L2s arriving and being built, but they’re being used, so people are starting to build on them as sort of a scaling alternative to Ethereum, while remaining within the EVM ecosystem.”