Arbitrum, a layer 2 network built on the Ethereum blockchain, is off to a strong start this year, with significant increases in trading volume and the value of its native token, ARB. This positive trend suggests a promising future for Arbitrum in the early stages of the year.
On-chain data from DeFiLlama reveals that the trading volume on decentralized exchanges (DEX) on the Arbitrum network has exceeded that of other blockchains, including Binance Smart Chain, Solana, and Polygon, over the past week. Notably, on January 5, the DEX volume on Arbitrum briefly surpassed that of Ethereum’s mainnet, a significant achievement. This success is largely due to a rise in crypto investors taking advantage of the network’s cost-effective transaction fees.
Data from L2Fees shows that Arbitrum is one of the most economical networks for transactions, with an average fee of $0.26. In contrast, the average transaction fee on the Ethereum network is over $5. This could explain why DEXes on Arbitrum have seen a substantial increase in trading volume. Although Ethereum’s DEX volume has regained its top spot, this data highlights the rapid growth of the layer 2 blockchain since its inception.
Furthermore, on-chain data from L2Beat shows that Arbitrum’s average of 12.85 daily transactions per second ranks it among the top three Ethereum-based layer 2 networks. It is only surpassed by zkSync Era’s 18.34 transactions per second and Ethereum’s 14.00 transactions per second. This demonstrates the significant traction Arbitrum has gained in the competitive landscape of layer 2 solutions.
The rising DEX volume and increased network activity have led to a surge in the total value of assets locked (TVL) within the blockchain. TVL is an important measure of the capital invested in a blockchain or decentralized finance (DeFi) protocol. Since the start of the year, the blockchain has seen a significant positive net flow exceeding $250 million. This surge has pushed Arbitrum’s TVL to a record high, reaching $2.64 billion on January 12.
At the same time, Arbitrum’s ARB has shown impressive performance, with a more than 20% increase this year. ARB has outperformed leading cryptocurrencies such as Bitcoin and Ethereum. However, due to the recent broader crypto market downturn, the ARB token has been significantly affected, experiencing a decline of approximately 10% to $2.13 at the time of reporting.
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| Information | Details |
|---|---|
| Geography | Global |
| Countries | |
| Sentiment | positive |
| Relevance Score | 1 |
| People | None |
| Companies | Solana, BeInCrypto, Arbitrum, L2Fees, Ethereum, Trust Project, zkSync Era, Polygon, L2Beat, DeFiLlama, Binance Smart Chain |
| Currencies | Chain Games, Solana, Bitcoin, Arbitrum, Ethereum |
| Securities | None |
