Ethereum’s layer 2 scaling solution Arbitrium continues to rule the roost as its unique addresses count reached an all-time high of nearly 2.92 million addresses, according to block explorer Arbiscan.
Over a year, the fourth-largest blockchain in terms of total value locked [TVL], has recorded a jump of a whopping 792%.
Not only that, Arbitrum flipped Ethereum itself in daily transactions, establishing its dominance in the layer 2 landscape.
Data from Arbiscan also shows that the number of daily transactions on the blockchain has skyrocketed from 159,919 on January 1 to over 1,103,398 at the time of writing this article.
This represents an increase of about 590% in less than two months.
In comparison, the number of daily transactions on Ethereum increased a meager 46% in the same period to 1,084,290, per Etherscan.
Arbitrum’s recent expansion can be attributed to GMX, a decentralized spot, and perpetual exchange that went live in September 2021 and has since experienced rapid development.
GMX presently makes up around $457 million, or 30%, of all of Arbitrum’s TVL. Although its presence there is only around a fifth as large, the trading platform is also deployed on the Avalanche [AVAX] blockchain.
Decentralized finance platforms such as GMX utilized smart contracts to facilitate users to transact without the need for middlemen, and users’ fees are collected as a mechanism to compensate liquidity providers and community members.
Recently, GMX has been so prosperous that over the course of a 24-hour period last weekend, it generated more revenue from transaction fees than the Ethereum blockchain did.
Ethereum L-2s Were Seen As Much-Needed Answer To ETH’s Mounting Prices
Rollups [also known as layer 2 platforms], which are secondary blockchains that bundle and “settle” transactions on Eth, were seen as saviors to the ETH’s mounting accessibility issue when the token’s transaction prices soared last year due to increased user demand.
These L-2s utilize the security infrastructure already in place on Ethereum, as opposed to sidechains like Polygon PoS that bundle transactions and settle them on the blockchain.
Optimism and Arbitrum were the first significant roll-up chains to enter the market; they were both dubbed “Optimistic” rollups due to the method they employ to borrow Ethereum’s security.
At press time, Ethereum’s one-day fees stood at $6.4 million, while Arbitrum’s one-day fees sit at roughly $154k, which is less than 2% of Ethereum’s network fees for the day, as per cryptofees.info.