Arbitrum Leads in Key Ethereum L2 Areas: Will ARB Price Follow?
- Arbitrum has surpassed all other Ethereum L2 in terms of total number of applications.
- Online activity grew, but TVL continued to decline.
Since then, arbitration (ARB) launched its token, it took over the L2 space, and how!
In recent months, the protocol has managed to maintain its dominance in the Layer 2 sector despite the emergence of new entrants.
Layer 2 networks are on the rise
According to Token Terminal data, Arbitrum was able to see one of the highest volumes of inflows and outperform other Tier 2 solutions on the market. Ethereum (ETH)
net.
Source: Token terminal.
Arbitrum was also doing very well in terms of activity. Analysis of Artemis data by AMBCrypto showed that the number of daily active addresses on the Arbitrum network has increased significantly.
Last week, the number of active addresses increased from 250,000 to 400,000. The number of daily transactions also increased, amounting to about 1.5 million at the time of publication.
Some problems ahead
However, Arbitrum has encountered some problems on the DeFi front.
Notably, DEX (decentralized exchange) volumes on Arbitrum have dropped from 2.2 billion to 500 million over the past few days.
Along with this, TVL (Total Value Locked) has also been affected. Since March, the amount of TVL collected on Arbitrum has fallen from $3.3 billion to $2.65 billion.
The combination of these factors led to a loss of income for the network.
Another problem was the development of the network. An AMBCrypto check of Token Terminal data showed that the number of code confirmations has decreased.
Along with this, the number of core developers participating in the network has also decreased. These factors may hinder Arbitrum’s overall growth in the future.
Source: Token terminal.
While these factors may momentarily impact Arbitrum’s growth, its growing activity shows that the protocol may improve in the future as users remain interested in the network.
Additionally, the popularity of layer 2 solutions such as Arbitrum contributes to the popularity of layer 1 solutions, in this case Ethereum.
Real or not, here is the market cap of ARB in BTC.
Layer 2 solutions help networks like Ethereum scale and also make the network more accessible to users.
The growth of the Arbitrum protocol will inevitably lead to an increase in the popularity of the Ethereum network.
This is an automatic translation of our English version.