These Two Altcoins Shine in Ethereum Layer-2 Solutions!

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Arbitrum and Optimism, Ethereum They are among the leading solutions in the layer-2 scaling ecosystem and the competition between them is increasing.

According to L2beat data, the total market share of these two leading solution providers is around 84% and their dominance in the industry continues.

Both networks aggregate and process non-ETH transactions using rollup technology. A compressed version is then sent back to the Ethereum main chain, reducing transaction time and costs.

Arbitrum One is the industry leader with a total value locked (TVL) of $3.38 billion and a dominant market share of 53.7%. Optimism on the other hand, ranks second with a 30.5% share in the TVL and L2 market of $1.91 billion.

DeFi researcher “DeFiIgnas” revealed the two most popular layer-2 ecosystems on Feb. compared.

Ethereum Layer-2 Solutions Growing

According to Dune Analytics, Arbitrum Although it has recently surpassed Ethereum in daily transactions, it is now again below Ethereum.

Total transaction activity in Layer-2 networks, Koinfinans.comAs reported, Ethereum has crossed the network. Optimism’s trading volume dropped sharply after the Galaxy Quests bounty program ended. However, it has increased thanks to the recent partnership of Coinbase and the new L2 platform Base.

The researchers note that while Optimism has been released before, it lags behind Arbitrum.

Due to the launch of Optimism, Arbitrum gained an early lead in transactions and users.

Both networks are heavily venture capital-backed; Optimism raised $178 million worth $1.65 billion, while Arbitrum raised $143 million worth $1.2 billion.

Arbitrum appears to be leading the way in terms of cheaper gas fees despite processing more transactions and having three times more active wallets. Also, Arbitrum launched the Nitro upgrade in August 2022. This increased efficiency and significantly lowered gas fees.

Optimism will launch the Bedrock update in April, which offers modularity, simplicity, and Ethereum equivalency for layer-2 solutions. It is also possible to point out that DeFi ecosystems of both networks are growing faster than any other major chain.

Arbitrum and Optimism Are Highly Competitive

Arbitrum grew 62% last month, outpacing Polygon and Avalanche, while Optimism grew 35%, outpacing Phantom and Cronos. The researcher came to the following conclusion:

All in all, the competition between them is great for users and the entire DeFi ecosystem as we get better user experience.

TVL for the entire tier-2 ecosystem is around $6.34 billion, a 53% gain since the start of 2023. According to L2beat, it is currently only 15% down from its all-time high of $7.47 billion in April 2022.

ethereum layer-2 solutions

dYdX on the other hand, it stands out as the third largest layer-2 network in terms of TVL with a market share of approximately 6%.

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