Arbitrum, one of the most awaited Ethereum scaling solutions, has attracted $2.9M on its first day after launch, becoming the 11th largest so-called Layer 2 platform, according to L2BEAT.
Offchain Labs, a blockchain software maker, launched Arbitrum on Aug. 31 with the promise to offer lower fees and faster transactions. So far, it’s delivering: ETH transfers on Arbitrum were going for less than $1, compared with a median cost of almost $11 on Ethereum, according to a Dune Analytics dashboard. That compares with fees of $0.000926 on Polygon, the most popular Ethereum scaling solution, which has $5.29B in assets locked. Worth noting is that Arbitrum is throttling its usage to match Ethereum’s — as Offchain Labs lifts the cap, fees should continue to decrease.
Simple trades on Uniswap’s Arbitrum deployment are going for under $5 on the day of the launch, according to the Layer 2’s block explorer Arbiscan. That’s roughly ten times cheaper than Uniswap trades on Ethereum’s Layer 1 chain — $81 and change, according to a dashboard by Dune Analytics.
Ethereum scaling has concentrated on “rollups” solutions, of which there are different flavors. Arbitrum falls in the optimistic rollups family, together with Optimism, which soft launched with only one project in January. Rollups refer to a technology which takes transactions off the main Ethereum chain to lower cost and increase speed, and then confirm a bundle of transactions on Ethereum directly.
Optimism has $137.9M in total value locked. While that’s 47 times greater than Arbitrum’s TVL, some of the largest DeFi projects are already on Arbitrum. Uniswap, Sushiswap, and Balancer are on its system, while lending platforms MakerDAO and Aave are also set to join Arbitrum’s rollout.
Arbitrum differs from Optimism in its launch strategy — the L2 opened to the public with an ecosystem of established DeFi apps ready from the get go. The project whitelisted over 400 apps, with dozens already live, before opening to the public — this means users will be able to carry out multi-app procedures easily because the familiar tools are available.
Arbitrum will have a composable DeFi ecosystem live within weeks of their public launch thanks to onboarding apps in advance.
Optimism has opted for a more progressive launch and has yet to fully disable its whitelist, meaning projects need to seek approval with the L2 to deploy on its mainnet. Synthetix, Uniswap, the options protocol Lyra, and a handful of others are on the L2.
“I have no doubt that either of these projects are going to be successful,” blockchain engineer and founder of cryptofees.info, David Mihal, told The Defiant. “There’s just so much demand for cheap blockspace now and cheap applications.”
Arbitrum, like Optimism, doesn’t use a token. So unlike other scaling solutions like Polygon, or blockchains like Avalanche and Celo which have launched nine figure incentive programs to attract users, both Arbitrum and Optimism will be primarily dependent on their close integration with Ethereum to attract liquidity.
Mihal believes composability may make it so Arbitrum ends up attracting interdependent apps in one crypto vertical, with Optimism attracting other verticals. “We might see one of them become the DeFi chain and the other one getting other types of use cases,” the engineer said.
L2s inherit their security directly from Ethereum, known to be one of the most secure blockchains, with over 3,000 nodes verifying transactions to Etherscan. This differs from sidechains which rely on their own security models to scale.
“It’s been a long time coming,” said Steven Goldfeder, CEO and co-founder of Offchain Labs, the company which developed Arbitrum, on a webcast. “I don’t think anything’s perfect, but I think that we’re very happy with where we are today and will continue to iterate on that.”