Because of the rapid increase in the percentage of daily transactions for these protocols, Ethereum has reached its lowest point in 2.5 years. These roll-ups total roughly the same number of transactions as their base. On Ethereum, layer 2 protocols, particularly Arbitrum and Optimism, are becoming increasingly active.
Daily transactions on Ethereum mainnet, Optimism, and Arbitrum since the start of 2020.
Ethereum mainnet transactions are at their lowest point in 2.5 years, but Layer 2 rollups now process as many transactions as mainnet. pic.twitter.com/3BilZvRUOh
— Patrick | Dynamo DeFi (@Dynamo_Patrick) December 26, 2022
Currently, there are 2.34 million addresses in existence. The number of daily transactions has been declining, down 55% from its peak of 573,613 on November 9. There have been 86.27 million transactions on Arbitrum in all. Despite such stellar results, Optimism now outpaces Arbitrum in daily transaction volume, recording nearly twice as many and generating more significant revenues.
In addition, DefiLlama claims that Arbitrum has a more significant total value locked. Its TVL worth is $1.06 billion, which is $400 million higher than Optimism (OP). Additionally, this valuation places Arbitrum above Polygon, another Ethereum Layer 2 roll-up, whose token is currently the tenth-largest cryptocurrency asset by capitalization.
A closer look at Arbitrum
Given the market’s recent relative stability, thousands of percent jumps may look out of the ordinary if we compare them to the beginning of the year. Delphi Digital claims that airdrop seekers, who have no interest in Arbitrum’s foundations and create artificial activity on the network to be paid, are the primary cause of increasing network activity.
The bulk of wallets on Arbitrum are those of typical users, who conduct up to 100 transactions each day and typically behave well on the blockchain. However, due to Sybil’s attack, a potential airdrop, more than 350,000 wallets have only performed one transaction. A targeted Sybil assault on a blockchain entails the establishment of several false identities to obtain access to the network and exploit it for financial benefit. Large blockchain networks typically have specific defenses against Sybil attacks.
After the Merge upgrade and the DeFi and NFT market problems, Arbitrum and other L2 networks’ popularity has been declining sharply. Like other networks launched after Ethereum’s scaling problem, Arbitrum seeks to lower transaction fees and boost network throughput. Nevertheless, the Ethereum network’s current network activity is regular and can be handled and managed without the aid of other blockchains like Arbitrum.