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Arbitrum – Will the Protocol Remain the Strongest Layer 2 Blockchain?

 


Thanks to the Ethereum merge, September was a successful month for all Layer 2 (L2) platforms. Arbitrum in particular impressed with its steady growth. But can the protocol stay at the top?


Arbitrum is an L2 blockchain on Ethereum. Goal: Faster transactions and greater scalability . Despite the predominantly negative mood on the crypto market, the protocol has repeatedly surprised with positive news in recent months. 


As of September 21st, the NFT marketplace also supports OpenSea Arbitrum to give customers “access to their favorite NFTs on their favorite blockchains” . This OpenSea achievement and the launch of the Nitro upgrade in September brought huge media attention to Arbitrum. 


Arbitrum continues to dominate the market

Arbitrum recently had the largest market share among L2s with more than $2.39 billion in total value locked (TVL) . With that, the protocol holds about 51% of the total L2 TVL, followed by Optimism with a share of 29.91% .

However, slacking social media interest and a macro-driven bear market have caused Arbitrum's TVL to fall 3.9% over the past week. 


The TVL of the protocol has therefore hardly increased this quarter. In contrast to its competitor Optimism, the protocol did not launch its own token to stimulate the TVL.


With the Ethereum Merge, an efficiency boost for the L2s is expected, which could further secure the Arbitrum network.  


The numbers speak for themselves

Compared to the previous quarter, daily transactions on Arbitrum are up 62.7% despite the unfavorable macro environment. The increasing confidence among investors is reflected primarily in the sharp gap between deposits and withdrawals. 

In fact, deposits accounted for 53.66% of total activity in the third quarter, outpacing withdrawals by 231% . 


A report by The Tie highlights Arbitrum's remarkable ability to sustain steady growth without offering incentives like its competitors .


Soon, Arbitrum's healthy DeFi ecosystem should see steady growth in user numbers again. The launch of a token and the anticipation that comes with it, together with strong marketing campaigns, could prove to be particularly beneficial. 


DISCLAIMER

All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at their own risk.

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