Arbitrum, a layer 2 network built on the Ethereum blockchain, is witnessing a robust performance as the new year unfolds. Notably, the platform has experienced significant upswings in trading volume and the valuation of its native token,
Indeed, this positive momentum signals a promising trajectory for Arbitrum in the early stages of the year.
Arbitrum’s Thriving DeFi Ecosystem
On-chain from DeFiLlama shows that trading volume on decentralized exchanges (DEX) on the Arbitrum network has surpassed other blockchains, including BINANCE Smart Chain, , and Polygon, over the past week. Remarkably, on January 5, the DEX volume on Arbitrum briefly outpaced that of Ethereum’s mainnet, marking a noteworthy milestone.
This accomplishment can be largely attributed to a surge in crypto investors leveraging the network’s cost-effective transaction fees
According to from L2Fees, Arbitrum is one of the most economical networks to transact, boasting an average fee of $0.26. In stark contrast, the average transaction fee on the Ethereum network exceeds $5. This could be the reason why DEXes on the Arbitrum have experienced a significant increase in trading volume.
While Ethereum’s DEX volume has reclaimed its leading position, this data underscores the rapid growth of the layer 2 blockchain since its inception.
Moreover, on-chain from L2Beat indicates that Arbitrum’s average of 12.85 daily transactions per second positions it among the top three Ethereum-based layer 2 networks. It trails only zkSync Era’s 18.34 transactions per second and Ethereum’s 14.00 transactions per second. This reflects the substantial traction Arbitrum has gained in the competitive landscape of layer 2 solutions.
Total Value Locked Skyrockets
The surging DEX volume and heightened network activity have resulted in a spike in the total value of assets locked (TVL) within the blockchain. TVL is a crucial metric for gauging the capital invested in a blockchain or decentralized finance () protocol.
Since the beginning of the year, the blockchain has witnessed a notable positive net flow exceeding $250 million. This surge has propelled Arbitrum’s TVL to an impressive all-time high, reaching $2.64 billion on January 12.
Simultaneously, Arbitrum’s ARB has demonstrated remarkable performance, marking a more than 20% increase this year. ARB has outperformed leading cryptocurrencies such as and Ethereum.
However, in the wake of the recent broader crypto market downturn, the ARB token faced a notable impact, experiencing a decline of approximately 10% to $2.13 at the time of reporting.
