Arbitrum’s dominance in the Layer 2 ecosystem will continue to grow in the first quarter of 2023 following the number of unique titles on Arbitrum reached an all-time high.
On Tuesday, February 21, the Arbitrum Layer 2 scaling solution overtook Ethereum in terms of daily transactions. This further increased Arbitrum’s dominance as a leading Layer 2 rollup solution.
Arbitrum is a technology solution designed to scale Ethereum. Arbitrum chains can do everything that can be done on Ethereum. You can use Web3 applications, install smart contracts, etc. But the big advantage is that these transactions will be cheaper and faster on the Arbitrum chain.
The number of daily transactions on Arbitrum, the fourth largest blockchain overall by total committed value (TVL), jumped from 159,919 transactions per day on January 1 to more than 1,103,398. That’s roughly a 590% increase in less than two months, according to block analysis firm Arbiscan.
In comparison, the number of daily transactions on the Ethereum blockchain increased by a narrow 46% to 1,084,290 in the same period, according to Etherscan alone.
In addition, the number of unique addresses on Arbitrum’s network reached an all-time high of around 2.95 million addresses. Data from TVL aggregator DeFiLlama shows that Arbitrum’s TVL has jumped 81% since January 1 to roughly $1.85 billion.
However, Ethereum still collects orders of magnitude more transaction fees
However, Arbitrum is not the only one that has overtaken Ethereum in recent months. GMX, the decentralized exchange belonging to Arbitrum, also overtook Ethereum in daily fees last week. The growing Layer 2 ecosystem has also seen a number of new financial applications such as Camelot, Vela Exchange and Radiant Capital. All of these have increased their users and transactions by more than 100% in the last 24 hours on Nansen data according to
Despite the growth of Arbitrum transactions and addresses, Arbitrum still lags Ethereum in terms of network fees. At the time of writing, Ethereum’s total one-day fees are around $6.7 million, while Arbitrum’s one-day fees are around $154,000. This is less than 2.3% of Ethereum’s total one-day network fees, according to cryptofees.info.
According to Walter Teng, Vice President of Fundstrat Global Advisors, Arbitrum’s increased activity may be due to users hoping and speculating regarding a possible Arbitrum airdrop. They are doing this despite the fact that Arbitrum developers do not plan or announce such a token airdrop for now.
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