Source: Adobe / H_Ko
Ethereum (ETH) Layer 2 (L2) scaling solution referee has climbed the ranks since its public launch, with the Total Value Locked (TVL) skyrocketing nearly 9,400% in two weeks.
According to the data provider of the crypto industry Dune analysis, the total value locked in Arbitrum is currently $ 2.12 billion. In terms of market shares, it is in second place with 30%, directly behind Polygon (MATIC) ERC20 Bridge with 34% and in front of 20% in front of Avalanche (AVAX) Bridge.
This is a notable increase for Arbitrum, which just two weeks ago – September 1st, to be precise – had a TVL of nearly $ 22 million. That makes this a whopping 9.387% increase within a few weeks.
The website shows a 2.376% increase in TVL for the runner-up arbitrum over the past seven days. In comparison, the 7-day change in Polygon TVL is -7%, for Avalanche -8%, while for Solana (SOL) Wormhole it is 80%.
Arbitrum is an Optimistic Rollup (OR) – a Layer 2 solution, and it is compatible with Ethereum. The network is the base layer, or Layer 1, while solutions based on it are Layer 2.
As reported, decentralized finance (DeFi), yield farming and the non-fungible token (NFT) sector have put a heavy strain on the Ethereum network, leading to a now ubiquitous sight of skyrocketing fees.
OR is one of the tools often cited as a solution to the scalability problem of Ethereum, which promises a much higher throughput of the blockchain.
According to Nick Chong, an investment analyst at ParaFi Capital (that’s a supporter of Offchain laboratoriesFirst, people turned to other Layer 1 options in search of a solution to the high fees, but these “often compromised security with smaller sets of nodes and a centralized bridge infrastructure”. Meanwhile, a rollup is “a scaling solution that takes on the security of the underlying network while improving transaction throughput and fees,” Chong said.
Optimistic rollups are expected to fully improve Ethereum’s transaction fees by 50x.
That said, an AMM transaction on the mainnet that costs $ 50 can cost $ 1 or even less, which dramatically improves the user experience.
– Nick Chong (@ n2ckchong) September 13, 2021
Chong also noted that it will be interesting to watch projects that are launched first on Arbitrum and then expanded to other networks.
“Don’t sleep on Ethereum L2s – they’re not even in their final form,” tweeted an analyst at the crypto research firm Messari, Ryan Watkins, who also compared using this platform to “using Ethereum in early 2020” and described the experience as “incredible”.
Some even commented that Arbitrum processed more transactions than Bitcoin (BTC) over the past day. Per Arbiscan there were 267,608 transactions on Arbitrum on September 12th. On the same day, there were 192,544 transactions on Bitcoin, according to BitInfoCharts.
On August 31, Offchain Labs announced that its Arbitrum One mainnet had been opened to the public. The beta launch of Arbitrum One for developers started in May.
In the same announcement, the company reported that it had raised its Series B funding round under the direction of $ 120 million Lightspeed Venture Partner.
Arbitrum does not have a token.
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