Ethereum Layer 2 projects are currently a hot topic in the crypto sector. This is particularly beneficial for the two Optimistic Rollup scaling solutions, Optimism and Arbitrum. Although the transaction costs on the Ethereum mainchain in recent months have fallen sharply, the networks are seeing a steady influx of capital and users. Since the scaling solutions are still significantly cheaper than the ETH mainchain despite the sharp drop in Ethereum transaction costs, more and more projects are implementing their protocols on the scaling solutions.
The difference is minimal for individual transactions, but can pay off in bulk. At the time of writing, one costs normal ETH transaction $0.56 on the main chain, $0.04 on Arbitrum, and $0.09 on Optimism. Both Arbitrum and Optimism are therefore significantly cheaper than Ethereum.
This circumstance should have ensured that Arbitrum and Optimism have become increasingly popular in 2022. This development could continue in 2023. Optimism and Arbitrum have now grown so much that together they have overtaken the Ethereum mainchain in terms of daily transaction counts. The following graphic from dune.com underscores this development.
While on the Ethereum mainchain around 1.1 million transactions be performed on the day wrap Arbitrum and Optimism collectively handle over 1.4 million transactions per day.
Optimism unseats Arbitrum from the Layer 2 throne
Another interesting development to watch in the Layer 2 sector is the fact that Optimism has quietly dethroned Arbitrum as the Ethereum Layer 2 network with the most users.
According to Total Value Locked (TVL), however, Arbitrum is still the undisputed number one among the L2 networks. In addition, Arbitrum has not yet published its own token. Should Arbitrum launch this in the future, it is very likely that user numbers will again exceed Optimism due to various ARBI token incentives. Which network will ultimately win the race here or whether both can exist in parallel in the long term is therefore still open.
The increasing demand for Arbitrum and Optimism shows that more and more users are realizing the advantages of L2 networks and are withdrawing their capital from the comparatively expensive Ethereum mainchain. Furthermore, the ongoing competition between Arbitrum and Optimism shows how competitive the market shares in the L2 sector are. The development shows that it is far from clear who will come out on top in the long term. However, one thing is certain: L2 solutions like Arbitrum and Optimism are changing the way transactions are processed in the ETH ecosystem and are currently making a major contribution to the scaling of smart contract platforms.