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Ethereum Layer2 Lockup Volume Analysis: Arbitrum Leads the Race

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According to reports, L2BEAT data shows that up to now, the total lockup volume on Ethereum Layer2 is $8.99 billion, up 2.91% in the past 7 days. Among them, the largest lockup vol

Ethereum Layer2 Lockup Volume Analysis: Arbitrum Leads the Race

According to reports, L2BEAT data shows that up to now, the total lockup volume on Ethereum Layer2 is $8.99 billion, up 2.91% in the past 7 days. Among them, the largest lockup volume is the expansion plan Arbitrum One, which is approximately $6.058 billion, accounting for 66.63%, followed by Optimism, which has a lockup volume of $1.952 billion, accounting for 21.47%.

Total lockup on Ethereum Layer2 is $8.99 billion

If you have been following the cryptocurrency space lately, you might have noticed that Ethereum Layer2 has been gaining traction recently. With the increasing adoption and development of Ethereum-based projects, Layer2 solutions are becoming increasingly relevant. So it comes as no surprise that the total lockup volume on Ethereum Layer2 networks has hit an all-time high, with the expansion plan of Arbitrum One standing out as the largest lockup volume.
In this article, we will delve into the data provided by L2BEAT and analyze the lockup volume trends of Ethereum Layer2 networks. We will also explore why the Arbitrum One expansion plan is attracting such a significant lockup volume compared to other Layer2 solutions.

Ethereum Layer2 Lockup Volume Analysis

According to L2BEAT reports, the total lockup volume on Ethereum Layer2 has hit an impressive $8.99 billion. This represents a 2.91% increase in the past seven days alone. Furthermore, two networks, Arbitrum One and Optimism, dominate the market with a combined lockup volume of $8.01 billion, which is approximately 89% of the overall lockup volume on Layer2.

Arbitrum One Holds the Major Share of Lockup Volumes

Among these two dominant networks, the Arbitrum One expansion plan holds the lion’s share of the lockup volume. The platform boasts a lockup volume of $6.058 billion, accounting for 66.63%, out of which $2.273 billion is held under a lockup of more than 90 days. On the other hand, the Optimism network has a lockup volume of $1.952 billion, accounting for 21.47%, out of which $1.16 billion is under a lockup of more than 90 days.

Why is Arbitrum One Leading the Charge?

Several factors contribute to the increasing lockup volumes on the Arbitrum One expansion plan. Firstly, the Arbitrum One network provides a unique solution to Ethereum’s scalability problem by introducing ‘Optimistic Rollups.’ This technology helps process transactions off-chain and then batch the transactional data to submit them to the Ethereum main chain.
Secondly, many DeFi protocols have migrated to the Arbitrum One network, including popular projects such as Aave, Curve, and SushiSwap. This network enjoys massive adoption, facilitates instant liquidity, and performs better than other Layer2 protocols. Hence, it has garnered significant interest from investors.

Conclusion

The growth of Ethereum-based projects has resulted in scaling issues for the network. The rise of Layer2 solutions has helped overcome Ethereum’s scalability challenges and provide efficient transaction processing capabilities. Arbitrum One’s expansion plan has emerged as a dominant player in the Layer2 space, boasting a lockup volume of over $6 billion. The network’s popularity could be attributed to its unique solution to scaling issues and the significant adoption of DeFi protocols on its platform.

FAQs

What is Layer2?

Layer2 refers to secondary infrastructure built on top of the primary Ethereum protocol to handle complex computations and high-frequency transactions efficiently. These off-chain protocols offer scalability solutions to the existing blockchain network.

Why use Layer2 protocols?

Layer2 protocols offer a solution to the Ethereum network’s scalability challenges by processing transactions off-chain and submitting them to the Ethereum main chain. This technology optimizes the transactional process and enables the network to handle a significantly larger number of transactions.

What Are Optimistic Rollups?

Optimistic Rollups are technology solutions that enable off-chain processing of transactions in a secure and decentralized environment, allowing the Ethereum network to handle a higher volume of transactions without compromising its security or decentralization features.

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