Arbitrum faces problems as stablecoin outflows on the protocol intensify. Fees collected by the protocol declined, but Arbitrum maintained a high TVL.

arbitration [ARB] has managed to dominate the L2 space in recent months. Reportedly, interest in the protocol increased due to the highly anticipated airdrop of its token. However, it was discovered that Arbitrum could soon lose its top spot according to some datasets.

Realistic or not, here is ARB’s market cap in BTC terms

Here’s how

Well, the decrease in Arbitrum stablecoin outflows has been a worrying factor. Based on DefiLlama data, Arbitum recently experienced its second largest outflow of stablecoin liquidity, most of which came from USDT.

A decrease in stablecoin outflows suggests that demand for the protocol’s services may have declined or other competing protocols may have gained popularity.

Source: DefiLlama

Another worrying indicator for Arbitrum was the steep drop in fees collected by the protocol.

Despite observing high daily activity on its multi-transaction network, Arbitrum was unable to compete with other Tier 2 solutions in terms of fees collected on the network.

Source: Artemis

On the light side

Arbitrum’s TVL on its smart contracts remained impressive despite the drop in fees, surpassing that of other protocols such as Polygon and Optimism.

Data from Artemis showed Arbitrum had $2.3 billion in TVL, while Polygon and Optimism trailed behind with $1.1 billion and $950.2 million, respectively.

This superiority of Arbitrum could be further exaggerated by the success of its dApps. According to data from Artemis, Odos Protocol, a DEX aggregator on the network, witnessed a 500% spike in terms of daily active users on its network.

Is your wallet green? Check out the Arbitrum Profit Calculator

Notably, at the time of writing, there were over 20,000 users on the dApp. New dApps on the Arbitrum network could help the protocol attract more users to its platform.

When it comes to the ARB token, the price has dropped significantly in recent days.

ARB’s MVRV ratio remained high, indicating that some addresses are still holding profitable positions. This could lead to continued selling pressure on the token and thus a further price drop.

Source: Sentiment

This post Arbitrum in raw water, as the protocol shows a decrease in these important metrics

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