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

Arbitrum’s TVL leads in Ethereum layer 2 networks because of its many advantages that we will discuss more in our latest Ethereum latest news.

Arbitrum is one of the Ethereum layer 2 networks and it gained a lot of attention from crypto users and developers after it was launched. According to Footprint Analytics, Arbitrum’s TVL leads across all Layer 2 networks and totaled $2.25 billion. Arbitrum is one of the leading players of all of the networks. Despite this, Arbitrum’s TVL overtook other projects and surpassed the expectations because of its advantages. But what exactly are those advantages?

arbitrum projects
Data Source Footprint Analytics – Top 5 DeFi Protocols on Arbitrum

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

Most people ask why the Optimistic network, uses the rollups solution and it is not as good as Arbitrum. Arbitrum’s launch strategy onboarded more than 400 DeFi projects before it opened up to the public and dozens of projects were already online at the same time at the start of teh launch. This allowed users to complete a variety of operations in the ecosystem. Optimistic on the other hand uses a whitelisting mechanism and these projects are deployed on the main network. Because of Arbitrum’s open development mechanism, it wasn’t the head Defi protocol that made it famous but rather the various “degen” investmetns whcih offer high returns.

data footpritn
Data Source Footprint Analytics – TVL Share of Category On Arbitrum

Arbitrum’s initial TVL growth is because or ArbiNYAN attracts investors to stake their native tokens with returns of 1000% and more. The projects while not legitimate, allowed the new ecosystem to emerge. Arbitrum has 44 live projects that are not really large. Among them, the Defi category is dominated by DEX and it is lending and asset categories. DEX accounts for 56%of TVL and assets for 18%. Looking at the TVL ranking on Defi projects, these degen projects are not in the top 5 with mainstream projects that are rising on the top. Curve is in the first place with a TVL of $420 million.

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Source: https://www.dcforecasts.com/ethereum-news/arbitrums-tvl-leads-in-ethereum-layer-2-and-heres-why/

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