Optimism transactions surpass Arbitrum, but what’s driving user growth?
Optimism transactions surpass Arbitrum, but what's driving user growth?
The Thriving Potential of Optimism in the Blockchain Industry
The blockchain industry continues to expand rapidly, with decentralized finance (DeFi) at the forefront of this growth. Within the DeFi landscape, various layer-2 scaling solutions have emerged, aiming to address the scalability challenges of the Ethereum network. One such solution is Optimism, a layer-2 scaling solution that operates as a separate blockchain built on top of Ethereum.
Despite initially facing fierce competition in the DeFi space, Optimism has recently gained momentum and is showing signs of increasing demand from users. In late July, Optimism overtook its main competitor, Arbitrum, in terms of daily transactions, marking a significant milestone for the project.
The Rise of Layer-2 Scaling Solutions
Layer-2 activity on Ethereum has seen a remarkable increase, surpassing mainnet activity by more than four times, according to data from L2beat. The rise of layer-2 scaling solutions highlights the need for scalability and better user experiences in the blockchain industry.
Each layer-2 project focuses on addressing different aspects of Ethereum’s scalability challenges, with Optimism’s approach centered around rollups. Rollups bundle multiple transactions into a single transaction to be executed on the Ethereum base layer, inheriting all the security features from Ethereum. This approach allows for cost-effective and fast transactions for users.
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In contrast to Optimism, Arbitrum takes a more centralized approach, with a single entity responsible for submitting fraud proofs. This key difference in approach sets the two competitors apart and presents users with distinct advantages and drawbacks depending on their preferences and priorities.
Optimism’s Stellar Performance
Optimism’s recent growth in daily transactions and active addresses indicates a potential shift in dominance among layer-2 scaling solutions. Since July 20, Optimism has experienced a remarkable 47% growth in daily transactions, surpassing Arbitrum for the first time in six months. Additionally, the protocol has witnessed a 27.6% increase in daily active addresses, while Arbitrum’s activity has declined by 7.5%.
However, it is important to note that Arbitrum still maintains a larger total value locked (TVL) compared to Optimism. Arbitrum currently holds a significant TVL of $2.35 billion, whereas Optimism’s TVL stands at $920 million. Arbitrum’s dominance is notably evident in popular DeFi applications it shares with Optimism, such as Uniswap and Aave. Furthermore, Arbitrum boasts an impressive $500 million TVL in the derivatives exchange GMX.
Backing From Coinbase and Worldcoin
The recent surge in Optimism’s activity can be attributed to increased use from industry giants Coinbase and Worldcoin. Coinbase’s sandbox launch on July 21 provided developers with a test environment to build and deploy applications on Optimism. This initiative encourages the creation of new tools, applications, and protocols, promoting growth and innovation within the ecosystem.
Worldcoin, a project gaining substantial attention, has also embraced Optimism as a scaling solution. The token’s airdrop on July 26 further amplified activity on Optimism after supporting Uniswap on the Optimism mainnet. Worldcoin has also deployed most of its Safe wallets on Optimism, contributing significantly to the daily activity on the network.
New Privacy Features and Opportunities
Optimism’s ecosystem is set to undergo further developments, with proposals by O(1) Labs and RISC Zero to implement zero-knowledge-proof systems. These developments will provide the network with its own layers of zero-knowledge proofs, akin to developments on Polygon (MATIC) and zkSync. This addition of privacy features enhances Optimism’s potential and expands its range of use cases.
The growth in active addresses on Optimism signifies the network’s continuous expansion and the promise of future opportunities. With the successful implementation of privacy solutions, Optimism aims to attract more users and solidify its position as a leading layer-2 scaling solution.
In conclusion, Optimism’s recent rise in the blockchain industry demonstrates its potential to thrive despite competition, offering cost-effective and fast transactions to users. Backed by industry giants like Coinbase and Worldcoin, Optimism has witnessed substantial growth in daily transactions and active addresses. As the ecosystem continues to evolve, Optimism’s focus on privacy features provides additional opportunities for users and further strengthens its position in the market.
Transactions on Ethereum mainnet vs. layer 2. Source: L2beat
Transactions per second, 7-day change. Source: L2beat
Arbitrum vs. Optimism, number of unique daily active addresses. Source: GrowThePie
Share of transactions on Optimism, July 27. Source: Dune Analytics