Arbitrum vs Optimism: Which Layer 2 is Better?

Arbitrum versus Optimism. Architecture Ethereum is scaling natively With a detailed roadmap
following its switch to proof of stake. After the merge layer, two chains
like Arbitrum And Optimism are helping Ethereum
to share the workload. They use optimistic rollups to roll up
hundreds of transactions into one And offload the traffic from the Ethereum
mainnet into the second layer. This reduces the network load
for the first layer and allows for faster Transaction processing and cheaper fees
by doing the bulk of the computation On the L2 chain. Optimistic rollups derive their name
from the optimistic assumption That all transaction Data is valid when aggregated into batches
for verification on the L1 chain. Both chains use fraud proofs,
which you can imagine As tests for the validity of the data. Because these rollups are trustless
transaction finality is instant And the blockchains produce
a much higher throughput than Ethereum. The trade off is that there is a seven day
challenge Window for verifiers to challenge
the validity of submitted transactions. There is also a so-called sequencer
which orders The transactions
before they are submitted to the client. The main technical difference
between the two chains is that Optimism Uses single round from proofs, while
Arbitrum uses multi round fraud proofs In normal English. This means Optimism is method is faster
but potentially more expensive due To higher gas fees
because it's executed on the L1. Arbitrum’s way takes more time
but is more cost effective. Moreover, Optimism uses
the Ethereum virtual machine or even while Arbitrum has its own Arbitrum
Virtual Machine or AVM. This means Optimism as programing
language is limited to solidity. Arbitrum supports
all even programing languages. So in conclusion,
the technical differences are minimal And barely noticeable
for everyday users of both chains. So Arbitrum vs Optimism.

Let's talk about the ecosystem analysis. Since Arbitrum and Optimism
use a similar technical approach To scaling transaction throughput. Comparing growth metrics across
both chains is particularly Interesting in terms of TVL
arbitrage is clearly ahead in the score. According to DeFi Llama, the chain boasts
more than double the total value Locked of optimism
in their analysis of the two ecosystems. BlockCrunch found that Arbitrum
TVL is less dependent on one sector. Almost 30% of TVL comes from derivatives
and 22% from Dexes. Meanwhile, Dexes account
for almost 42% of the TVL On Optimism, with only about 70%
coming from derivatives. Another interesting detail Is the comparison of native versus
non-native protocols for TVL. 54% of Arbitrum TVL came from Native
protocols, but only 29% of Optimism. The reason for
that is the dominance of GMX on Arbitrum. GMX's alone accounts for almost 25%
of all the TVL on Arbitrum. Arbitrum also leads in terms of daily
active addresses and daily transactions. Its airdrop only accentuated this lead,
although you can probably expect The transaction and address count
to revert back to more normal numbers Actually quite soon. And as of this time, Arbitrum
means processing more daily transactions Than Ethereum while having more daily
active addresses as well. And this will likely
not stay the case for long. Both protocols are on a long term
upward trajectory for chain activity And show no signs of slowing down
Regarding key growth drivers Arbitrum them Benefited mainly from its Odyssey
NFT series and the nitro upgrade Before the airdrop activity spiked during
Odyssey as users were collecting NFTs Which may have been more useful
for a potential later airdrop. Still, after Odyssey
and the Nitro upgrade, daily Active users were permanently higher
than before for Optimism. The big one was its initial airdrop. Its op quests led to a temporary increase
in daily active users, But the network could not sustain
the level of activity in the long term. Optimism.

Second, Airdrop
received a fairly lukewarm reception, Probably because most users
were not eligible for this round. All of these events Were unsurprising, dwarfed by the activity
following the ARB airdrop. However, it remains to be seen If the activity on Arbitrum will tail off
after the cat is out of the bag. So let's talk about Arbitrum
vs Optimism and its future catalysts. So far the picture is clear. Arbitrum is the clear leader
among Optimistic rollups L2. But what does the future hold
for these two chains? Well, interestingly, The two chains are pursuing Slightly different approaches
to grow their market share. Optimism explained its gameplan
in a blog post about the OP Stack. The OP stack is Optimism
next phase of scalability. It’s a series of modules that work
as a blueprint for modular scalability And interoperable blockchains. Optimism designed this framework
and a flexible way to make it applicable To various types of blockchains,
not just optimistic rollups. The first official release of the stack
will be Optimism bedrock. It will introduce modularity to Optimism
and allow the separation of consensus, Execution and data availability layers
to help future proof the chain. The promise performance
improvements are reduce transaction fees, Optimize deposits
and withdrawals, and faster node sinking. Most importantly,
Optimism is collaborating With Coinbase to develop its new base
layer two Blockchain And the end goal is a super chain
comprised of a network of rollups built Using the OP stack. This ecosystem of interoperable
chains will share sequencing, proving And bridging infrastructure, fostering
seamless communication between networks. Arbitrum just finished playing its biggest
trump card, which is the ARB token drop, And this is an important milestone
and route to more decentralization. But of course, it's also an important
business decision that, as Arbitrum Hopes, will pay off by drawing more users
into the ecosystem in the long run.

Besides ARB, Arbitrum is planning To innovate the Arbitrum Nova,
Arbitrum Orbit, and its Stylus Upgrade. Arbitrum
Nova is a sidechain with up to 90% Lower gas fees
compared to the regular Arbitrum chain. Although it offers lower security Arbitrum
Nova is ideal For gaming social
and other high bandwidth applications. Opensea and Treasure DAO recently
launched marketplaces on Nova, providing Critical infrastructure
for future projects. Arbitrum Orbit enables developers
to permissionless early launch L3 And leverage Arbitrum technology
to build in the ecosystem With its upcoming Stylus Upgrade Arbitrum. Furthermore, it aims to introduce
even plus allowing contracts written in Rust C and C++ to interact synchronously
with existing solidity based contracts. This expansion opens the door
to a vast pool of developers Improving network performance
and reducing fees. So in conclusion, optimism focuses
on modularity, scalability And interoperability and cooperates
with Coinbase to gain a foothold Among builders in the space. Meanwhile, Arbitrum seeks to expand
its reach to more developers And improve network performance Through its Stylus Upgrade
and the development of its Arbitrum. Nova Sidechain. So who will be the winner
in this optimistic roll up battle? For now, Arbitrum has the lead. It boasts a significantly higher TVL And has more daily active users
and processes more transactions. And its airdrop quite literally
broke its own system for a few minutes And ARB has twice
the market capitalization of AOP Over Optimism is by no means down,
and now its cooperation With Coinbase could put its solutions
in front of millions of new users. Moreover, it remains to be seen
whether Arbitrum will keep going strong Now that the long awaited
airdrop is finally concluded.


Coinbase is a popular cryptocurrency exchange. It makes it easy to buy, sell, and exchange cryptocurrencies like Bitcoin. Coinbase also has a brokerage service that makes it easy to buy Bitcoin as easily as buying stocks through an online broker. However, Coinbase can be expensive due to the fees it charges and its poor customer service.

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