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- The Arbitrum network seeks to solve the ‘congestion’ problem that the Ethereum network has been experiencing.
- Arbitrum has the fastest-growing user base, with over 50% of all daily Ethereum transactions in January.
Arbitrum is a layer 2 solution that uses the ‘transactions roll-ups technology’. Smart contracts on Ethereum’s main chain can scale up exponentially by communicating with those on the second tier chain of Arbitrum. This layer 2 scaling approach handles massive volumes of transaction processing, with the results being logged on the main chain, significantly enhancing speed and efficiency.
The Arbitrum Bridge is the main channel for moving ERC-20 and ETH tokens from Ethereum (Layer 1) to Arbitrum (Layer 2). But, in order to begin the bridging process on Arbitrum Bridge, a wallet is necessary. The unique qualities of Arbitrum Bridge will be discussed in this blog.
Fundamentals of Arbitrum
The majority of decentralized applications (dApps) are powered by the open-source Ethereum network. The fundamental goal of the chain is to create a worldwide network that anybody may use to create decentralized programmes with all states and data distributed and accessible to everyone. Smart contracts, which programmers can use to generate virtual currencies, are supported by Ethereum. Examples of some built on Ethereum include decentralized lending protocols, non-fungible tokens, decentralized exchanges, and many more.
By introducing optimistic Arbitrum rollups, which run as a separate layer of the network, Arbitrum makes it possible to validate smart contracts and relieve the ETH mainnet of the burden of too many transactions.
The Arbitrum network currently stands out for its Ethereum Virtual Machine (EVM) compatibility, which means that developers don’t need to learn a new coding language to be able to build their dApps within the Arbitrum mainnet. Other protocols also aim to achieve similar improvements.
Why is its User Base growing so rapidly
According to a research report released by Bernstein on Monday, among the top blockchains, Arbitrum has the fastest-growing user base. Its project tokens have also been among this year’s top performers.
According to Bernstein, the number of transactions has grown quickly, hitting nearly 50% of all daily Ethereum transactions in January. Revenue and daily transactions are four times larger than they were six months ago. According to it, developer activity is also brisk.
Decentralized finance, which refers to a variety of financial applications carried out on a blockchain, was mentioned in the report by analysts Gautam Chhugani and Manas Agrawal. “Arbitrum is seeing aggressive growth in users/active users/transactions/revenue, led by wider adoption and the scale up of DeFi and gaming applications on the chain,” they wrote.
The adoption of the blockchain is being fueled by a burgeoning app ecosystem, according to the research, with prominent DeFi and gaming applications driving development. They include GMX, a cryptocurrency derivatives exchange with daily revenues of $500,000 and daily volumes of about $400 million.
The memo mentioned Gains Network, Vela, Camelot, Rage Trade, Dopex, Lyra, and Buffer Finance as more trading platforms that are developing on Arbitrum. Radiant Capital and Factor, lending and asset management apps, are also gaining popularity, while games made on the TreasureDAO ecosystem are scaling well.
The enthusiasm surrounding new wallets, wallet activation patterns, and transaction volume is very high. According to the research, the number of daily active users are up three times over the previous six months, and new user acquisition has increased by half in that time.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
