TL;DR
- Arbitrum has surpassed 1 billion transactions since its launch in August 2021, establishing itself as the leader in Layer 2 protocols.
- With a total value locked (TVL) of $2.5 billion, it positions itself ahead of Base, which has a TVL of $2.2 billion.
- Vitalik Buterin sets decentralization standards for Layer 2s, stating that only those reaching “Stage 1” will receive his support starting in 2025.
Arbitrum has managed to surpass the threshold of 1 billion transactions since its launch in August 2021.
This achievement demonstrates its strong position as the leading Layer 2 protocol in terms of total transaction volume, despite its competitor, Base, Coinbase’s Layer 2 network, having processed 755 million transactions, which allows it to handle more daily transactions compared to ARB. However, regarding total value locked (TVL), ARB leads the category with approximately $2.5 billion, while Base sits close with a TVL of $2.2 billion.
Arbitrum operates using a technology known as optimistic rollups, which allows assuming the validity of transactions unless challenged. This methodology helps reduce the load on the main Ethereum network while ensuring the security of transactions.
The Effectiveness Problems of Arbitrum
Although the system includes fraud prevention measures, it is still considered not completely decentralized. Additionally, Offchain Labs, the company behind ARB, has developed a second chain called Arbitrum Nova, focused on off-chain data storage and application scalability.
The increase in Arbitrum’s activity was especially notable in August, where growth in its user base was observed. This was a significant turnaround, given that in July, the ecosystem faced some important challenges, being perceived as the least effective among Ethereum’s Layer 2 solutions. During that period, only 0.47% of ARB addresses were considered “in the money,” while 96.78% were “out of the money,” raising concerns about the protocol’s reputation.
Vitalik Buterin Calls for More Decentralization
On the other hand, Ethereum co-founder Vitalik Buterin has proposed strict decentralization standards for Layer 2 networks. In a recent statement, Buterin emphasized that only those reaching “Stage 1″ in terms of decentralization will receive his support. This new framework, which will take effect in 2025, aims to ensure that L2 protocols move toward greater decentralization, incorporating elements such as validity proofs and multi-signature setups.
The combination of these factors suggests that Arbitrum has entered a more favorable environment, with a growth outlook that contrasts with the difficulties of the recent past