coinculture.com
You might also like
Ordinals Push Bitcoin To Record 44M Non-zero Addresses: Glassnode
What is Polkadot (DOT)? Beginner’s Guide to Polkadot
Arbitrum, an Ethereum Layer 2 protocol, has gained fresh market attention since early this year. During this period, DeFi TVL on the network has been increasing by about 50% in less than two months.
Better Tidings For TVL On Arbitrum In 2023
The Ethereum Layer 2 scaling solution began the new year with the same momentum as any other protocol. The bear market severely impacted the decentralised finance (DeFi) business, leading TVL across networks to plummet substantially.
Nonetheless, Arbitrum has been able to capitalise on the current market rebound to increase its TVL. By mid-February, the protocol, which had a TVL of $1.02 billion, had risen to almost $1.5 billion. In less than two months, TVL on the protocol has increased by nearly 47%.
Arbitrum TVL jumps to $1.51 billion in 2023. Source: DeFiLlama
This quick increase in TVL puts it ahead of other protocols, such as Polygon, another scaling option for Ethereum Layer 2. In addition, Arbitrum is now comfortably ahead of Avalanche, Fantom, Solana, and Cardano.
To put this into context, Avalanche, Fantom, Solana, and Cardano have respective TVLs of $926.65 million, $508.58 million, $249.68 million, and $110.15 million.
Based on its current TVL, it is the fourth-largest DeFi network after Ethereum, BNB Chain, and Tron.
Market recovery pushes Ethereum price above $1,500. Source: TradingView.com
What Promotes The Ethereum Layer 2 Blockchain
Like everything in the crypto sector, adoption has been the driving force behind the expansion of the Arbitrum TVL. There have been significant debuts on the blockchain since January, which has helped to increase interest in it.
One example is the December debut of the Camelot decentralised exchange (DEX). GRAIL, the native token of the DEX, surged substantially, surpassing $3,000 for the first time. This prompted the distribution of more tokens, which increased network demand.
GMX, a derivatives platform, now has the largest TVL at $463 million, accounting for more than 30% of the total TVL. Uniswap V3 was also released on Arbitrum with a TVL of $117.8 million. SushiSwap, ZyberSwap, AAVE V3, Cruve, and Synapse are key protocols fully functioning on Arbitrum.
Curiously, Arbitrum does not have its native token. Wrapped Ether (WETH) powers the network, which costs less than the Ethereum Layer 1 blockchain.