Arbitrum crosses $2 billion in TVL with rollups, ready to slash ETH gas by 50%

  • Ethereum gas cost hit between 100-200 gwei several times this year due to NFT usage boost.
  • The launch of Arbitrum and Optimism, alongside other Layer 1 protocols, likely to drive innovation in dApps. 
  • Launching on Arbitrum first boosts scalability and reduces cost for apps with fee-sensitive users.

Arbitrum has emerged as a leading scaling solution for decentralized applications, offering 10 to 100x improvements in scalability depending on the transaction. The rising number of smart contracts on optimistic rollups are likely to cut Ethereum gas fees.  

$2 billion flow into Ethereum layer 2 scaling solution Arbitrum

Within the past week, nearly $2 billion poured into Arbitrum due to rising interest in ArbiNYAN, that gained popularity as the first farming platform on the optimistic rollup. 

On September 13, the farming token hit $1.48 billion in total value locked, meaning nearly all funds on the Arbitrum network were redirected to ArbiNYAN for yield rewards. 

After a massive spike in ArbiNYAN’s TVL, the interest in the token dropped substantially. The token plunged nearly 90% within 12 hours, and it is trading at $1.61 at the time of writing. 

With Arbitrum One’s mainnet launch, two decentralized exchanges – Uniswap and SushiSwap – have joined the optimistic rollup. 

The rollup was conceived as a project that would ease the network congestion on Ethereum and reduce the transaction fees. Since its launch on August 31, Arbitrum has facilitated smooth runs for ETH-based projects, lending protocol Aave and decentralized exchange Uniswap.

Nick Chong, digital asset manager at ParaFi Capital, an alternative investment fund focused on blockchain and decentralized finance markets, shared his thoughts on Arbitrum’s growth story:

Chong explains how Ethereum’s gas cost hit between 100-200 gwei since an explosive rise in the number of DeFi, Yield farming and NFT projects on the network. Optimistic rollups like Arbitrum – full-scale – have the possibility of cutting Ethereum’s gas fees in half, depending on transaction size. 

Smart-contract projects that launch first on Arbitrum can further reduce costs and capitalize on the roll-up scalability.

Arbitrum’s adoption and increasing contribution to Ethereum’s daily transaction volume and the optimistic roll-up accounts for over 75% of the layer two solution’s TVL. 

Colin Wu, a Chinese journalist, shared Arbitrum’s growth statistics in a recent tweet:

The challenge posed by Optimistic rollups is the confirmation delay it requires, and this may lead to a slowdown in Arbitrum’s adoption by smart-contract applications. Due to enhanced scalability and compatibility with Ethereum Virtual Machine (EVM), Arbitrum is attracting smart contracts and dApps. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

Since XRPArmy and lawyers in the crypto ecosystem consider the US Securities & and Exchange Commission’s (SEC) move to pull documents out of public view as evidence that the case is coming to a close, a Ripple win appears more likely.

More Ripple news

Bitcoin Weekly Forecast: BTC must hold $45K to target new all-time highs

Bitcoin price is on a rollercoaster ride as it crashed violently on September 7, consolidated for a few days after that and went on an uptrend to undo the losses. Over the past 24 hours, however, BTC seems to be consolidating for a volatile move without a clear directional bias.

More Bitcoin News

Chiliz price to retrace before CHZ runs up

Chiliz price is stuck in a tight consolidation above a crucial support floor and shows no signs of recovering from this slump. In fact, CHZ might retrace lower before heading on an uptrend.

More Chiliz News

ICX Price Prediction: ICON prepares for 20% descent as bulls fade away

ICON price looks ready for a swift downswing after an explosive run over the past ten days. The crypto markets’ slowdown after the recent run-up makes this bearish scenario a perfect fit. Going forward, investors can expect ICX to head lower and retest stable support barriers.

More Cryptocurrencies News


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast