Ethereum and its Layer-2 solutions have faced sluggishness recently, yet data indicates strong fundamentals for both.
Notably, Arbitrum stands out as a leading player in the Layer-2 narrative.
1. Total Value Locked (TVL)
TVL is a crucial metric that reflects a network’s popularity and investor trust. It also helps gauge potential undervaluation when comparing TVL to market capitalization. Currently, Arbitrum boasts a TVL of $2.8 billion against a market cap of $2 billion, significantly outpacing other Layer-2 solutions. Although Arbitrum’s TVL has plateaued in recent months, its stability amid falling ARB token prices underscores the ecosystem’s resilience.
2. Daily Active Addresses
Active addresses provide insight into user engagement. Arbitrum ranks second behind Base, with around 500,000 daily active users. This positions Arbitrum well ahead of competitors like Optimism and ZKsync ERA, showcasing its appeal in the Layer-2 space.
3. Decentralized Exchange (DEX) Volume
High trading volume on DEXs signals adoption and liquidity. Arbitrum ranks fourth in DEX volume, positioned just below Ethereum and ahead of Base and Optimism. This performance indicates strong user activity and protocol revenue generation.
4. Derivatives Volume
Derivatives trading reflects market sophistication and institutional interest. Arbitrum excels here, ranking second, just behind Hyperliquid. The variety of perpetual trading protocols on Arbitrum, such as GMX and Vertex, highlights a robust derivatives landscape.
5. Market Capitalization of ARB
One of the most compelling indicators of ARB’s potential undervaluation is its market cap compared to other Layer-2s. Despite its strong performance across multiple metrics, Arbitrum’s market cap is on par with platforms like Optimism, suggesting significant room for growth.
I rotated some funds into Arbitrum once again!
Ethereum and its Layer-2s have been sluggish in recent months but data suggests:
1) Ethereum is here to stay
2) and Arbitrum is one of the top dogs in the L2 narrative.Let’s dive into some on-chain key… pic.twitter.com/dqTzfPwS3O
— Kantian (@kantianum) September 21, 2024
On September 20, Ethereum spot ETFs also saw net inflows of $2.87 million, with Grayscale’s mini ETF contributing significantly. This reflects ongoing institutional interest, further solidifying Ethereum’s position in the market. As Arbitrum continues to thrive, both Ethereum and its Layer-2 solutions appear poised for a promising future.
On September 20, the total net inflow of Ethereum spot ETF was $2.8729 million. Grayscale mini ETF ETH had a net inflow of $2.8729 million in a single day, and the total net asset value of Ethereum spot ETF was $6.921 billion. https://t.co/Tvs2oCS03I
— Wu Blockchain (@WuBlockchain) September 21, 2024
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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