- Arbitrum is one of the fastest-growing level-2 network in the industry.
- It has moved above Polygon, the pioneer of Ethereum scaling.
Arbitrum has been making headlines in the past few months as it has continued gaining market share in the blockchain industry. It has overtaken some of the best-known blockchain networks like Polygon, Optimism, Avalanche, and Cronos. Therefore, in this article, we will look at what Arbitrum is and some of its features.
What is Arbitrum?
The blockchain industry is constantly evolving. It started with Bitcoin, which is the oldest blockchain platform in the world. After that, it came second-generation projects like Ethereum that sought to increase the level of utility in the industry.
Other platforms have come up in the past few years. For example, the Decentralized Finance (DeFi) industry has continued gaining traction. It has billions in total value locked (TVL) and millions of users around the world. Other sub-sectors are non-fungible tokens (NFT) and gaming among others.
Ethereum is still the dominant chain in the industry. It is known for its stability, safety, and overall adoption. However, it has several challenges, including high transaction costs. This is where Arbitrum comes in.
Arbitrum is a layer-2 network that helps developers build applications that are easy to use and cheap to transact with. While Ethereum transactions can cost tens of dollars, Arbitrum ensures that these transactions cost cents. It also has significantly high transaction speeds.
Arbitrum market share
Arbitrum exists in an increasingly competitive industry. For one, it competes with other layer-1 networks like Avalanche, Cronos, and Solana. It also competes with other layer-2 blockchains that have significantly higher speeds. Some of its biggest competitors in the industry are blockchains like Polygon, Optimism, Immutable X, and Loopring.
Read more: How to invest in Polygon.
According to its website, Arbitrum has a market share of about 53% in the industry. And data compiled by DeFi Llama shows that the network has a total value locked (TVL) of more than $1.89 billion. This makes it the fourth-biggest player in the DeFi industry. It has also moved above Polygon, which is widely known as th pioneer of the industry.
GMX is the biggest player in Arbitrum. It is a leading DEX that makes it possible for users to trade perpetual futures. Other top dApps in Arbitrum are Uniswap V3, Radiant, Sushi, and Synapse among others.
How to invest in Abitrum
Unlike other layer 1 and layer 2 networks, Arbitrum does not have a token for its ecosystem. Its developers have seen no need for launching such a token. Therefore, it is not possible to directly invest in Arbitrum. However, one can invest in it indirectly by buying external tokens of its dApps like GMX and Uniswap.
The future of Arbitrum seems bright since the developers are not interested in short-term moves of the token. Data compiled by TokenTerminal shows that the network’s fees in the past 30 days jumped by 145% to over $3.25 million. Annualized fees came in at over $39.5 million. The number of active users in the ecosystem has jumped to over 92k.
