Arbitrum One Outshines Other L2 after Exceeding 1B Transactions

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As an analyst with a rich background in the crypto space, I find myself consistently impressed by the rapid progress and resilience shown by projects like Arbitrum One. Having witnessed the rise and fall of numerous blockchain projects, it’s always refreshing to see one that not only survives but thrives amidst challenges.

In a span of only three years following its launch, Arbitrum One surpassed a significant milestone of one billion transactions, outpacing its rivals in the Layer 2 optimistic rollup sector for Ethereum. Data from Blockscan shows that Arbitrum’s main competitor, Base, has managed 755 million transactions, while OP Mainnet recorded 347 million, placing Arbitrum One at the forefront of the pack.

Arbitrum Recovers after a Period of Gloom

Concerning the Total Value Locked (TVL), Arbitrum stands out among other L2 blockchains. With a TVL of $2.5 billion, it ranks the highest and is closely trailed by Base with a TVL of $2.2 billion, according to Defillama’s data. In terms of daily transactions, Coinbase L2 currently takes the lead, while Arbitrum holds the second position. Notably, Arbitrum has shown high network activity in August, suggesting an expanding user base.

The strong outcomes on these measurements indicate a more favorable environment within the Arbitrum system, which was once perceived as the least effective Ethereum L2 solution in July. During that time, the network exhibited poor price performance and other declining metrics, contributing to broader concerns about its reputation amidst the crypto market’s overall downtrend. Despite this, various entities remained apprehensive about Arbitrum’s standing.

During that time, they were hesitant since only a small fraction, approximately 0.47% (equivalent to around 5,360 addresses), of Arbitrum’s total addresses were generating profits or “in the money”. Conversely, a much larger percentage, roughly 96.78% (over 1.15 million addresses), were not making profits and considered “out of the money”. The remaining group was identified as being neither profitable nor unprofitable, or simply “at the money”, showing no losses or gains.

19,270 Polygon addresses, representing approximately 2.96%, were in profit (or “in the money”). The remaining majority, about 627,110 addresses, which is 96.44% of the total, did not yield a profit (or “out of the money”). Additionally, around 3,870 addresses, equivalent to 0.60%, were at the break-even point.

The recent achievement, indicated by Arbitrum and various key performance indicators, hints at a more advantageous phase for the L2 (Layer 2) network.

Decentralization Vision for Ethereum L2s

In related second-language blockchain news, Vitalik Buterin, co-founder of Ethereum, has established rigorous guidelines for the decentralization of L2 networks on the blockchain. In a post from September 12th, he clearly defined the threshold for L2 scaling networks, stating that only those achieving “Stage 1” in terms of decentralization will gain his endorsement and public backing. This new policy is set to be implemented in 2025.

He emphasized the projects he’s connected to or has stakes in, mentioning that this won’t alter his position. In the latest update, Buterin stated, “It’s either Stage 1.” This Stage 1 introduces crucial components such as fraud detection, validation proofs, a multi-signature setup supervised by external oversight and a secure council. These measures aim to steer L2 networks towards greater decentralization.

This strict decision highlights Ethereum’s vision for a decentralized and secure future. In response to the Ethereum co-founder’s statement, several zero-knowledge rollup teams have adjusted to reach this goal by late 2024.

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2024-10-01 17:03