- zkSync Era outperformed Arbitrum in several areas.
- The price of ARB remained relatively stable.
Since early 2023, Arbitrum [ARB] has shown remarkable progress. The protocol has successfully acquired a significant user base. And the recent airdrop served as a catalyst for further improving activity on the network.
Realistic or not, here is ARB’s market cap in BTC terms
Is Arbitrum lagging behind?
However, it turned out that zkSync’s rapid progress could pose a challenge for Arbitrum. According to recent data, zkSync Era’s L1-to-L2 bridge accounted for more than 63% of all bridged ETH to L2s through native bridges. This amount is three times higher than the ETH bridged to Arbitrum through the official native Arbitrum bridge.
For context, most L2 projects on Ethereum encourage users to bridge assets through their official bridge rather than third-party multichain bridges. As a result, the deposit activity of users in these new chains through their own bridges provides useful information regarding the progress in this sector.
Source: Dune analysis
The perceived disparity between the amount of ETH bridged to Arbitrum via the official native bridge and zksync Era’s L1 to L2 bridge has several implications. First, it means intense competition from zksync Era as it has attracted a significant portion of users looking to bridge their ETH to Layer 2 solutions. This highlights the need for Arbitrum to improve its value proposition and address potential shortcomings in its native bridge to remain competitive in the marketplace.
Second, Arbitrum could focus on prioritizing improving the functionality, performance, and user experience of its native bridge to streamline the process of moving assets from Tier 1 to Tier 2. ETH.
The current state of Arbitrum
In terms of activity, Arbitrum’s daily active addresses were seen to decrease significantly. According to Artemis data, the number of active addresses on Arbitrum dropped from 311,000 to 119,000 in the past month. This also significantly reduced the number of transactions on the protocol.
Source: Artemis
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Moving towards Arbitrum’s token, ARB was trading at $1.13 at the time of writing. According to Santiment’s data, the speed dropped significantly along with the growth of the network. This indicates a lack of interest from new addresses in the token.
Source: Sentiment