Arbitrum and Optimism are in fierce competition for leadership in layer 2 (L2) scaling solutions for Ethereum. This will only benefit the entire ecosystem.
There are two undisputed leaders in the field of scaling solutions for the Ethereum blockchain. These are Arbitrum and Optimism. According to the L2beat analytics platform, these two providers now account for 84% of the entire market for Layer 2 (L2) scaling solutions for Ethereum.
Recall that all these projects help to solve the problem of low network bandwidth by transferring part of the tasks to sidechains – block chains built on top of the main blockchain. This makes transactions on the Ethereum network cheaper and faster.
Arbitrum vs. optimism
At the moment, the industry leader is Arbitrum One. The total value of assets blocked in this protocol (TVL) is $3.39 billion. This provides the project with a market dominance of 53.6%. In second place is Optimism with a TVL of $1.95 billion and an L2 market share of 30.8%.
These figures have recently led on Twitter, a DeFi analyst under the nickname DeFiIgnas (@DefiIgnas):
Interestingly, Optimism is inferior to Arbitrum, although it was launched earlier. According to Dune Analytics, recently Arbitrum also outperformed the main Ethereum network in terms of intraday transactions. However, he could not gain a foothold on the achieved levels and rolled back again.
The number of transactions on the Optimism network has dipped sharply since the end of the Galaxy Quests reward program. However, the protocol subsequently received support thanks to the news of a partnership with the Coinbase exchange and its new Base L2 platform.
In general, both networks receive tangible support from venture capital. So, Optimism raised $178 million, and its valuation is $1.65 billion. Similar figures for Arbitrum are $143 million and $1.2 billion.
Arbitrum is the leader in cheap gas, despite processing more transactions and having three times as many active wallets, according to data cited by DeFiIgnas. Also in August 2022, Arbitrum upgraded the Nitro network, which significantly increased its throughput and lowered gas prices. Optimism plans to launch the Bedrock update in April.
Over the past month, the Arbitrum network has grown by 62%, outperforming Polygon and Avalanche. Optimism grew by 35%, which allowed the network to overtake Fantom and Cronos.
As the analyst concluded, the competition between these two projects only plays into the hands of users and the entire DeFi ecosystem.
Perspectives of the L2 Ecosystem
In general, activity on L2 blockchains is showing strong growth, competing with the main network, Ethereum.
Thus, the total number of transactions per second (TPS) in second-tier networks turned out to be higher than in Ethereum. At that time, the leading networks of the second level were also Arbitrum and Optimism.
The total value of assets locked in all protocols of the L2 ecosystem is about $6.34 billion. Since the beginning of 2023, the figure has grown by 53%. Now it is only 15% short of the all-time high of $7.47 billion set in April 2022, according to data l2beat:
Source: Cryptocurrency
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