Arbitrum’s growth cannot be attributed to airdrop farmers alone. In this article i am going to cover five charts that illustrate its potential:
- Network Activity is increasing.
- TVL Growth is steady.
- Token Price has significantly increased.
- Developer Interest is growing.
- Community Engagement is high.
These charts demonstrate that Arbitrum has significant potential for long-term success in the cryptocurrency market and I’m going to show you why i believe it is a Blue-chip crypto.
Transactions per Second: Throughout 2023, Layer 2 solutions have dominated the conversation in the world of cryptocurrency. The launch of Optimism sparked a surge in scalability for Ethereum ($ETH), and the introduction of the $ARB token has only accelerated the growth of the Layer 2 market.
As a result, there has been an influx of announcements from a diverse range of scaling solutions, indicating that the industry is ripe with potential for continued innovation and growth in the months and years to come. Below is a chart of the transactions per second, we can see that it has been just going up and up since it launched.
Total Value Locked: With a TVL of $1.75B and the upcoming $ARB airdrop estimated to be worth between $0.5B to $2B, there’s no doubt that the liquidity injection will have a positive impact on the related altcoins.
To identify undervalued small-cap projects, investors can use specific metrics based on the type of platform. For example, for perpetual swap protocols, investors can evaluate the price-to-fees ratio, while also taking into account any potential catalysts. On the other hand, for decentralized exchanges and similar platforms, the price-to-TVL ratio can be used to assess undervalued opportunities.
Daily Transactions: The daily transaction count for $ARB is on an upward trajectory, surpassing previous levels:
- In the beginning of the year, the average daily transaction count for $ARB was 159K. Today, it stands at an average of 1.2m transactions per day.
- Impressively, this is higher than $ETH’s average daily transaction count of 935k, indicating that $ARB is gaining traction and becoming a significant player in the cryptocurrency market.
Top Protocols: The cryptocurrency market operates in a cyclical loop, with protocols gravitating towards where the volume is, leading to increased activity:
- More transactions lead to more protocols being developed, which in turn attracts more users to the platform.
- It’s therefore not surprising to see that many of Ethereum’s largest protocols are also among the largest within Arbitrum, as the platform continues to attract a growing user base and generate increased transaction volume.
Daily active Addresses: The significant increase in activity on $ARB has motivated top builders in the cryptocurrency space to migrate to the platform and develop new projects.
As a result, the number of daily active addresses on the platform has grown by an impressive 470% YTD. At this rate, $ARB is on track to permanently surpass $ETH in terms of daily active users. This is a promising indication of the platform’s continued growth and potential for long-term success in the cryptocurrency market.
Stable Coin market Cap: In the DeFi space, liquidity is a crucial element, and the growth of stablecoins is an excellent indicator of ecosystem expansion.
Interestingly, there has been an inverse relationship between Ethereum and other platforms YTD:
- $ETH has decreased by 15%
- $ARB has increased by 105%
- $OP has increased by 5%
Unique Contracts Deploying On L2s: The number of protocols deployed on the Arbitrum ecosystem has experienced an extraordinary surge over the past year, with no signs of slowing down anytime soon.
So far this year, the number of contracts deployed on $ARB has increased by an impressive 156%, and this growth appears to be reaccelerating.
Furthermore, it’s worth noting that $ARB has seen a 10x increase in deployed contracts compared to $OP, indicating that the platform is quickly establishing itself as a major player in the DeFi space. With this level of growth and momentum, it’s clear that $ARB is poised to make a significant impact on the cryptocurrency market.
Retention Rates: Retention rates are an essential metric to determine whether a protocol is being used primarily for airdrop farming or is genuinely valuable to its users.
In this regard, $ARB has consistently demonstrated impressive retention rates of over 30%, even after 8 weeks of usage.
In contrast, $OP reveals a much lower retention rate of 20% for the same timeframe. This suggests that $ARB is more effective in retaining its user base, which is a positive indicator of its long-term potential in the cryptocurrency market.
I hope you found this article informative and insightful into Arbitrum. Rather than relying on hearsay or the opinions of others, it’s always better to base your buying decisions on concrete data and analysis. By examining the trends and understanding the market dynamics, you can make more informed and independent decisions when it comes to investing in cryptocurrencies like $ARB.