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Here's Why Arbitrum Became #1 Ethereum L2 Scaler: Opinion

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Sat, 5/08/2023 - 15:48
Here's Why Arbitrum Became #1 Ethereum L2 Scaler: Opinion
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Amid aggressive competition in the Ethereum (ETH) L2s segment, it remains pretty concentrated. Almost 90% of its aggregated total value locked (TVL) is controlled by three networks. Here's how Arbitrum (ARB) keeps its supremacy in this field.

Arbitrum succeeds since it remains "credibly neutral," Patrick McCorry says

Cryptocurrency researcher Patrick McCorry, former assistant professor at King's College London, is sure that "credible neutrality" is one of the reasons behind Arbitrum (ARB), Ethereum-based network's success. Its team has never launched "official" decentralized applications on Arbitrum (ARB), leaving space for open competition.

With no "favorite" applications officially supported by Arbitrum DAO and Offchain Labs, any team can come to the blockchain and start deploying "like an equal."

McCorry's position echoes that of the Arbitrum (ARB) community head, who slammed the L1s and L2s that created their own applications on corresponding blockchain networks:

The worst thing a chain team can do is start creating their own native dApps or products on top of it. You just end up being in direct competition with teams building on your chain within that vertical

Arbitrum (ARB) has never endorsed any applications as its "native": All crucial protocols using it as a technical basis are created by third-party teams.

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As covered by U.Today, there is strong evidence that Arbitrum's (ARB) growth is fueled by real usage in DeFi: Airdrop hunters are only responsible for 5-6% of its transactions.

Arbitrum vs Optimism rivalry gains traction

By press time, Arbitrum (ARB) remains the largest Ethereum-based network by TVL: It has accumulated $5.93 billion in liquidity across all of its verified protocols. This is equal to 56.16% of the whole Ethereum L2s ecosystem. Its closest competitor Optimism (OP) is responsible for $2.95 billion, or 27.8% of liquidity.

However, in the past week, Optimism (OP) has surpassed its rival in a number of crucial metrics, starting from the number of daily on-chain transactions.

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It was also closer to surpassing Arbitrum (ARB) in the net number of daily active addresses. However, both metrics might only be rallying due to the hype around Worldcoin (WDC), a controversial eye-scanning project by OpenAI's Sam Altman.

That is why analysts are sure that nothing poses a threat to Arbitrum's (ARB) dominance in the L2s segment it has kept for a couple of months.

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