Despite a decrease in the value of the ARB token, Arbitrum has surpassed Solana in terms of active users. As transaction fees on Ethereum hit their lowest levels in years, Arbitrum, a Layer 2 network built on Ethereum, has experienced unprecedented activity.
On previous month, the daily number of active addresses on Arbitrum reached a historic peak of 856,000, representing a 150% increase from the 341,000 recorded in early May. This surge has propelled Arbitrum beyond Solana’s 833,000 daily active users, despite Solana’s recent popularity driven by a memecoin trading frenzy.
Impact of Ethereum’s Dencun Upgrade
This milestone coincides with Ethereum’s Dencun upgrade, which went live on March 15, reducing transaction costs on Layer 2 Ethereum blockchains by up to 99%. A week prior to the upgrade, Arbitrum recorded only 747,000 transactions; however, this figure skyrocketed to 1.5 million a week later, culminating in the peak observed on Monday.
Strategic Investment by Arbitrum DAO
Additionally, the Arbitrum DAO recently announced its intention to invest 35 million ARB tokens into stable and liquid assets. This move has attracted over two dozen companies proposing potential products, including major players like Franklin Templeton, a trillions-dollar asset manager, and Securitize, the firm assisting BlackRock in its asset tokenization efforts.
Despite these significant developments, the total value of cryptocurrency assets on Arbitrum has decreased by 22% to $15.7 billion, down from a historic high of $20 billion on April 1. Transaction volumes on Arbitrum’s decentralized exchanges have also fallen by 82%, dropping to $404 million from a peak of $2.2 billion on March 4.
Strategic Investment by Arbitrum DAO
The price of Arbitrum’s governance token, ARB, has similarly struggled. ARB reached an all-time high of $2.26 on January 11 and approached that level again on March 7, with a price of $2.17. However, since January, the token has declined by 58% and is currently trading at $0.94. In contrast, Ethereum has seen a rise of approximately 10% during the same period.
One potential reason for the lag in ARB’s price could be the significant token unlock by Offchain Labs, the development team behind Arbitrum, and its investors. On March 15, approximately $1.2 billion worth of ARB tokens were unlocked and distributed to these groups, with these tokens being vested for one year.
Leading Layer 2 for Total Bridged Ether
Nevertheless, Arbitrum remains the preferred Layer 2 blockchain for Total Bridged Ether. As of April 28, over 1.7 million Ether have been bridged to Arbitrum, while the 14 largest Layer 2 competitors have seen only around 1.5 million Ether connected to their blockchains.
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