Arbitrum has seen rapid growth as DeFi users deploy their capital in emerging yield farms.
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Arbitrum has seen a sudden upswing in total value locked after launching on Aug. 31.
Arbitrum Gains Momentum
Following its launch on Aug. 31, Arbitrum has topped the charts for the total value locked across all of Ethereum’s Layer 2 solutions.
According to data from L2Beat, the Optimistic Rollup solution’s mainnet beta, dubbed Arbitrum One, has secured more than $2.2 billion in total value locked. The amount locked has significantly increased in the last few days, jumping from around 37,000 ETH Friday to 654,000 Sunday.
Arbitrum was developed by Offchain Labs. The project leverages Optimistic Rollups to process transactions at a higher speed and lower cost than Ethereum mainnet while benefiting from the security of the base chain. It works by carrying data off-chain and sending batches of transactions to Ethereum mainnet as calldata. Arbitrum’s closest competitor, Optimism, also uses Optimistic Rollups, though delays in launching have led to Arbitrum stealing the Layer 2 spotlight so far.
Arbitrum has seen an exponential upswing in the number of unique addresses bridging to the network. According to the block explorer Arbiscan, 28,930 unique addresses made transactions on the network Sunday.
Arbitrum’s skyrocketing growth in total value locked was largely triggered by the launch of a yield farm called ArbiNYAN. Currently, the project contains 439,262.5 ETH worth about $1.4 billion. A new farming protocol on Arbitrum, Carbon Finance, has also managed to attract more than $60 million in a few days. A new project called Arbitrum Ape also launched on the network, though it’s been labeled a scam due to a suspected smart contract function that set a fee for withdrawing funds from the pool to 100% of the deposit.
Besides the yield farms, some of the most notable decentralized applications in DeFi, including Balancer, SushiSwap, Uniswap, and InstaDapp, have launched on Arbitrum. Other projects like Aave and MakerDao are planning to expand to the network soon.
The increasing popularity of Ethereum mainnet due to the boom in DeFi and NFTs has caused gas prices to surge on many occasions in the last year. Arbitrum is one of the projects that’s aiming to help Ethereum scale without compromising on security. Other EVM-compatible chains like Fantom and Avalanche have gained popularity in recent weeks. Still, unlike Layer 2 solutions, they operate their own consensus mechanisms, which means they do not directly adopt the security of Ethereum mainnet.
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Source: cryptobriefing.com