Arbitrum (ARB) witnessed a surge in user activity in May, resulting in an all-time high in addresses. The platform’s popularity can be attributed to its offerings in the fields of decentralized finance (DeFi) and non-fungible tokens (NFTs). This increased activity also helped ARB recover quickly during the recent market rally.
Arbitrum has now established itself as one of the top Layer 2 solutions for the Ethereum network. It provides faster and more transparent smart contracts for communication and transactions between L1 and L2 addresses.
The sudden growth in Arbitrum addresses has been remarkable, with the number of unique active wallets approaching 900,000. This growth trend started in March and has accelerated in the past two weeks. One of the main factors driving the growth of Arbitrum is its focus on attracting developers. Many new teams have chosen Arbitrum as the foundation for their decentralized applications (dApps).
Another reason for Arbitrum’s growth is the optimization of gas fees, which have decreased since the end of March, while transaction counts have increased.
Arbitrum already hosts several prominent multi-chain apps, including Uniswap, Sushi Swap, OKX DEX, Trader Joe, and Aave. The platform has also gained popularity in the web3 gaming sector, with many new competitive experiences being built using Arbitrum’s technology.
The Arbitrum DAO is currently voting on adding more projects as Orbit Chains, which will provide opportunities for connection with other L1 or L2 networks.
Arbitrum is introducing Orbit Chains to facilitate easier infrastructure creation and promote sustainable growth. These chains enable fast creation of new layers, allowing projects to quickly build their desired features and set up their mainnets without delay. In a market where new tokens are launched every minute, projects choose Arbitrum for its ability to swiftly create new features.
Arbitrum’s cross-chain bridge, which has high liquidity and a daily turnover of over $5 million, is widely used for wrapped Ethereum and various stablecoins. This bridge is part of Arbitrum’s DeFi ecosystem, which has seen its locked value grow to $2.76 million.
Unlike other networks, Arbitrum’s biggest growth phase occurred in late 2023, and the platform is now poised for more sustainable growth.
Arbitrum has recently started offering liquid restaking, a tool that allows users to tap into the value of locked ETH tokens. The Renzo multi-chain project has increased its holdings on Arbitrum by 25% in a month, locking in more than $324 million in notional value.
Arbitrum’s growth may also be attributed to its efforts to integrate Bitcoin into decentralized tools. While wrapped BTC coins have been used as collateral in various projects, platforms are now competing to bring Bitcoin into the realm of decentralized finance. Projects on Arbitrum are creating gamified solutions for Bitcoin DeFi, combined with NFT collections.
Despite the growing number of use cases, the ARB token is currently trading near its lower range at $0.99. It reached a peak of over $2.20 in early 2024 but has since returned to its baseline price.
While some traders anticipate a new downturn to the $0.80 range, the increasing usage of Arbitrum sets the stage for a potential rally. The ARB token has been traded for over a year and has successfully positioned itself among the leading Layer 2 solutions.
Source: Nansen
Article by Hristina Vasileva for Cryptopolitan.
