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Ethereum Blockchain’s robust Layer-2 network, Arbitrum, is making waves as it asserts itself as a dominant force in the evolving crypto landscape. The new year witnessed a surge marked by rising transaction volumes and a significant increase in the valuation of its native token ARB.
Arbitrum’s Trading Triumphs
The decentralized exchange (DEX) trading volume on the Arbitrum network has seen a notable increase, surpassing major Blockchain networks like Binance Smart Chain, Solana, and Polygon last week. Notably, on January 5th, Arbitrum’s DEX volume briefly exceeded that of Ethereum’s mainnet, marking a significant milestone for the Layer-2 network.
The driving force behind Arbitrum’s trading success lies in its cost-effective transaction fees. Data from L2Fees shows that Arbitrum’s average transaction fee is $0.26, which is almost one-twentieth of Ethereum’s average fee exceeding $5. This affordability factor has significantly contributed to the increased trading activity on Arbitrum’s DEXs.
Network Activity and Rising Interest
On-chain data from L2Beat highlights Arbitrum’s impressive position among Ethereum-based Layer-2 networks. With an average of 12.85 transactions per second, Arbitrum ranks third after zkSync Era and Ethereum. This strong network activity reflects the growing interest in Arbitrum’s Layer-2 solutions.
The rising DEX volume and increased network activity on Arbitrum have led to a significant increase in Total Value Locked (TVL) on the Blockchain. TVL serves as a critical metric for measuring capital invested in a Blockchain or decentralized finance (DeFi) protocol. In the early days of the year, Arbitrum witnessed a positive net inflow exceeding $250 million, raising its TVL to an all-time high of $2.64 billion as of January 12th.
Altcoin ARB Performance
In parallel, Arbitrum’s token ARB has exhibited an extraordinary performance, recording a value increase of more than 20% since the beginning of the year. This significant growth outpaces the performance of leading cryptocurrencies like Bitcoin and Ethereum.
However, it is worth noting that the recent downturn in the broader cryptocurrency market has also affected the ARB token. As of writing this article, the altcoin ARB is trading at $2.17.
