Arbitrum mainnet beta launched on the Ethereum network on Sep 01 and there’s astonishing progress on that front. As of Sep 21, the Ethereum scaling solution has crossed a Total Value Locked (TVL) figure of $2.6 billion in a short period of three weeks, overtaking its Bitcoin-based counterpart the Lightning Network by 23X. In comparison against Arbitrum, Lightning Network has a TVL of $114M despite being in operation for several years, at this point.
According to L2 Beat, the website tracking the metrics of all Ethereum based L2 solutions. Arbitrum has seen the migration of 796,502 ETH from the Ethereum mainnet, currently worth over $2.64B and up 18%+ in the past week. It commands a total market share of 73.94% amongst Ethereum based L2 solutions. That’s impressive growth and shows that the roll-ups based true L2 solutions incite user interest. The Lightning Network data took from DeFi Pulse and shows a total of $114M TVL, down over 7% in the past week.
Lightning Network usage and TVL were going up with the recent El Salvador Bitcoin plan implementation, as the LN was likely to play a key role in Bitcoin scaling by allowing economical operation for the average user, who couldn’t afford the Bitcoin base layer fees and processing times otherwise. However, the data indicate otherwise. One likely explanation is that the official Chivo Wallet with the green light for usage by the El Salvadorean Govt and one with the highest adoption doesn’t rely on on-chain transactions much. Despite being on the Lightning Network in some manner, processes most txs in a centralized manner.
About Lightning Network
The Lightning Network (LN) is a layer 2 protocol on top of the Bitcoin blockchain. It seeks to improve scalability and settlement speed, by moving small and frequent transactions off-chain. This allows fast peer-to-peer transactions with low fees. The protocol relies on micropayment channels restricted by the size of their deposits. In turn, those channels connect with each other and move liquidity amongst themselves. Only after a closed channel will the balance send to the actual Bitcoin blockchain and updated in the ledger.
Arbitrum One is an Ethereum scaling solution, utilizing the roll-ups solutions to super-scale the world’s largest smart contracts blockchain. The Ethereum base layer secures it and it doesn’t have a proprietary token. The EVM compatibility is there and Arbitrum supports Ethereum RPC interfaces too. Arbitrum reduces tx cost and speeds up tx processing time.