Fierce competition wages on between the different Layer-2 networks. Improving the scalability, throughput, and costs of Ethereum remains a pressing matter. Arbitrum has noted substantial growth recently and continues attracting more users.
Similar to other L2 solutions, Arbitrum focuses on improving the Ethereum ecosystem. That includes reducing transaction fees and alleviating network congestion. In addition, its network is designed to store computational and data elements of the main Ethereum network. Removing those elements from the L1 network ensures a smoother user experience.
Arbitrum has become a popular network for users and builders thanks to its efficiency and cheaper fees. In addition, various decentralized applications reside on the network, and there is substantial DeFi activity. Sustaining that initial momentum is always crucial for blockchain networks. So far, it is going well for this Layer-2 solution.
The data by Dune Analytics paints an exciting picture for Arbitrum fans. The network has almost 220,000 smart contracts and 2.7 million accounts. Remember, these numbers do not represent unique users or contracts deployed by unique wallet addresses. However, it does confirm the growing interest in the benefits of this Layer-2 solution.
One downside is how the overall monthly transaction count is drifting lower in recent months. The network peaked in November 2022, with activity dwindling in December and January. However, it still noted over 16.2 million transactions last month, a respectable number. In addition, February is off to a good start, with over 5.2 million transactions in the first week.
A crucial metric is the number of active weekly users. Those rates fluctuate for every blockchain network as user behavior changes often. Arbitrum continues to hit high levels for this metric, which is good to see. Surpassing over 200,000 weekly active users has become the norm rather than an exception. In addition, the monthly active users have hovered near 600,000 since November 2022.
As activity on this Layer-2 network picks up, it becomes more prevalent in decentralized finance. Thanks to a recent 25.6% DeFi TVL growth, Arbitrum now ranks above Avalanche and Polygon. It represents $2.55 billion in value across 184 protocols. Overtaking Tron for third place will take a while, as that network’s TVL remains at $5.3 billion.
GMX remains the dominant DeFi project on the network, ahead of Radiant and Gains Network. It is intriguing to see two derivatives-focused projects in the top three, whereas DEXes rank much lower. In addition, Radiant and Gains Network saw their TVL explode in recent weeks, although that growth will flatten eventually.
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