- Arbitrum outperformed all other Ethereum L2s in overall inflows.
- Activity on the network increased, but TVL continued to decrease.
Since Arbitrum [ARB] started the token and occupied the L2 space. Oh my god!
Over the past few months, the protocol has managed to maintain its dominance in the layer 2 sector despite new entrants.
Layer 2 networks are growing
According to Token Terminal data, Arbitrum recorded the highest volume of inflows and outperformed other layer 2 solutions on Ethereum. [ETH] Communication network.
Source: Token Terminal
Arbitrum was also very active in terms of activity. Analysis of Artemis' data by AMBCrypto revealed that the number of daily active his addresses on the Arbitrum network has increased significantly.
In the past week, the number of active addresses has increased from 250,000 to 400,000. The number of daily transactions has increased as well, remaining at around 1.5 million at the time of writing.
Source: Artemis
There are some future issues
However, Arbitrum faced some issues on the DeFi front.
Notably, the trading volume of the DEX (decentralized exchange) on Arbitrum has decreased from 2.2 billion to 500 million in recent days.
Accordingly, TVL (Total Value Locked) also took a hit. Since March, TVL collected on Arbitrum has decreased from $3.3 billion to $2.65 billion.
These factors combined to result in a loss of revenue for the network.
Source: Artemis
Another concern was network development. AMBCrypto looked into the token terminal data and found that the number of code commits was decreasing.
In addition to that, the number of core developers contributing to the network has also decreased. These factors may hinder his Arbitrum's overall growth going forward.
Source: Token Terminal
While these factors may temporarily impact Arbitrum's growth, its increased activity signals that the protocol may improve in the future as users continue to engage with the network. I'm proving it.
Additionally, the popularity of layer 2 solutions such as Arbitrum is driving the popularity of layer 1, in this case Ethereum.
Realistic or not, ARB's market capitalization in BTC is:
Layer 2 solutions help networks like Ethereum scale and make the network easier for users to access.
The growth of the Arbitrum protocol is sure to lead to an increase in the popularity of the Ethereum network as well.
