Optimism VS Arbitrum. One Race, Two Winners
Optimism flipped Arbitrum in transaction volume at the beginning of the week, and The Block published a triumphant article about it: Ethereum Layer 2 protocol Optimism surpasses Arbitrum in transaction volume. At the same time, Bankless was launching an episode on Arbitrum: What’s Hot in Arbitrum? | Arbitrum Ecosystem Guide. Ryan and David gathered relevant community leaders in the Arbitrum ecosystem to analyze the secret of the success behind Arbitrum (fun fact they mentioned: the Arbitrum Bridge contract is the 7th larger holder of ETH). But Arbitrum and Optimism are the two leading competitive L2 solutions.
They can’t both be winning!
(We’re aware Arbitrum is a Bankless sponsor, but the guys at Bankless were transparent about it, and they actually made a good case for the success of Arbitrum)
We dove into the data to find out what was actually going on.
TL;DR: Arbitrum leads in core metrics like TVL but seems to have lost momentum to Optimism, that’s riding on the competitive advantage of having a token and an upcoming upgrade, Optimism Bedrock.
There’s little doubt that the L2 space has been heating up since the year started. As we can see in this chart by L2Beat, TVL in L2’s is up 13% only in the last 7 days.
As reported by The Block, Optimism is the protocol that’s taking the lead in this increased activity.
Optimism transactions per day are ~600k, according to Etherscan.
Arbitrum transactions per day are lower and more stagnant.. ❤00k, according to Arbiscan.
The bigger picture says that Arbitrum is still the clear leader. Total Value Locked is higher in Arbitrum by a mile.ç
They used to be closer, but the collapse of FTX sent funds Arbitrum’s way. One of the deciding factors was probably the migration from margin traders from FTX to the decentralized platform GMX. Fun fact (thank you, Bankless podcast), GMX was the best-performing token in 2022.)
The bottomline seems clear: Arbitrum leads the way in liquidity and adoption, but Optimism is gaining momentum. This chart from @gm365 on Dune Analytics proves this hypothesis. while bridge activity shows that Arbitrum leads with over Ξ2,1M vs Optimism’s Ξ460k, the activity in the last 7 days (TVB or Total Value Bridged) is much closer: Ξ8k to Arbitrum VS Ξ7k to Optimism.
The number of unique addresses tells the same story. Regardless of the big difference in TVL, Arbitrum and Optimism have a similar amount.
Arbitrum Unique Addresses (2,559,267 on Jan 17th) — Arbiscan
Optimism Unique addresses (2,624,031 on Jan 17th) — Etherscan
Optimism’s optimism is probably riding two waves:
For one thing, there’s the $OP. At a time when investors are looking for exposure to Ethereum’s ecosystem, Optimism has a key that Arbitrum lacks. Optimism’s token has rallied since the beginning of the year ($0,91 on Jan 1st, $1,75 Jan 18th)
For another, Optimism is launching Bedrock soon. Bedrock is “the cheapest, fastest, and most advanced rollup architecture. Ever.”. Bedrock will improve tx price and speed in the short term, and, just as its name states, it sets the foundations for future upgrades that will make it even more competitive. Bedrock is live on Goerli since Jan 12th
For more context on the Optimism VS Arbitrum Race, we recommend Galaxy Research.
For a broader view of rollups (optimistic and zero knowledge), check out our report The State of Ethereum Scalability.
