Arbitrum’s TVL Leads Ethereum Layer 2 And Here’s Why

Arbitrum’s TVL leads Ethereum Layer 2 networks due to its many advantages which we will discuss further in our latest Ethereum news.

Arbitrum is one of Ethereum’s Layer 2 networks and it caught a lot of attention from cryptocurrency users and developers after its launch. According to Footprint Analytics, Arbitrum’s TVL leads all Layer 2 networks and totaled $ 2.25 billion. Arbitrum is one of the main players in all networks. Despite this, Arbitrum’s TVL outperformed other projects and exceeded expectations for its advantages. But what exactly are those advantages?

Data Source Footprint Analysis: Top 5 DeFi Protocols at Arbitrum

Arbitrum’s optimistic digest solution is more popular with developers in the short term, but in the long term, ZK’s digest network might have to catch up due to faster speed and stronger security. Arbitrum also processes 40,000 transaction requests per second, which is much larger than Ethereum’s 15-30 requests, meaning it reduces network congestion and increases speed while reducing costs. Based on external data, Arbitrum’s transaction cost is 1.8 Gwei compared to ETH 64 Gwei.

Most people ask why the Optimistic network uses the cumulative solution and is not as good as Arbitrum. Arbitrum’s launch strategy incorporated more than 400 DeFi projects before opening to the public and dozens of projects were already online at the same time at launch. This allowed users to complete a variety of operations in the ecosystem. Optimistic, on the other hand, uses a whitelist mechanism and these projects are implemented on the mainnet. Due to Arbitrum’s open development mechanism, it was not Defi’s main protocol that made it famous, but the various “degen” investments that offer high returns.

data footprintData Source Footprint Analysis: TVL Category Participation in Arbitration

Arbitrum’s initial TVL growth is due to o ArbiNYAN attracting investors to stake its native tokens with returns of 1000% and above. The projects, while not legitimate, allowed the new ecosystem to emerge. Arbitrum has 44 live projects that aren’t really big. Among them, the Defi category is dominated by DEX and they are the Loans and Assets categories. DEX represents 56% of TVL and assets 18%. As for TVL’s ranking on Defi projects, these degen projects are not in the top 5 with the top projects climbing on top. Curve is in first place with a TVL of $ 420 million.

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Arbitrum’s TVL Leads Ethereum Layer 2 And Here’s Why

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