The post Arbitrum, Optimism in 2024: Rising transactions, falling values—why? appeared on BitcoinEthereumNews.com.

In the ever-evolving crypto space, two Layer-2 Ethereum solutions to scale, Arbitrum (ARB) and Optimism (OP), have witnessed significant fluctuations in their transaction activities and fiscal performances thus far this year. However, despite a surge in transaction traffic within their ecosystems, both networks have observed a decline in their Total Value Locked (TVL) and the value of their native tokens. Data from IntoTheBlock shows that Arbitrum and Optimism usage has quadrupled over the last twelve months. This growth was particularly notable in the second quarter after adopting the EIP 4844. The main objective of this proposal is to enhance Ethereum’s ability to handle larger volumes by implementing a more effective type of transaction, leading to reduced fees and improved processing capacity. Arbitrum has seen growth, with the number of transactions climbing from less than 1 million to a record high of 2.6 million on June 26. At the same time, Optimism has shown an increase in the number of transactions, up to 800,000 in April and now at 409,000. Still, Arbitrum remains highly active, currently surpassing Optimism’s transaction count by over 1.5 million despite the latter’s fluctuations in performance. However, the data presents a different picture when examining the overall sustainability of these platforms in terms of their financial health, as measured by the TVL, which represents the total amount of investment occurring within the platforms’ financial systems. Data from DeFiLlama shows that both Arbitrum and Optimism saw a surge in TVL earlier this year.  Arbitrum’s TVL reached $3.1 billion in March, while Optimism’s reached $1 billion. During this period, individuals began to adopt these platforms and increase their investments. However, this trend is currently in flux, as Arbitrum and Optimism’s TVLs have decreased to $2.7 billion and $665 million, respectively. However, several possible explanations exist for the observed decline…

---

Filed under: News - @ July 1, 2024 10:18 am