Arbitrum noticed a huge increase in terms of daily activity and flipped Ethereum Development activity on the protocol also dropped as ARB took a hit
Arbitrum once got a lot of attention when the highly anticipated symbolic airdrop was about to be announced. Thanks to the same, the protocol even managed to surpass even Ethereum in terms of daily active addresses.
However, as time went on, the hype around the Arbitrum network started to die down.
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As a result, transactions on Arbitrum and activity on the network began to decline. Arbitrum surpassing Ethereum in terms of daily activity was written off as a one-time incident.
However, at the time of writing, the same thing happened for the second time. Arbitrum outperformed Ethereum in terms of daily activity, suggesting that Arbitrum’s increased activity level could be indicative of a trend rather than an isolated incident.
This high level of activity can be attributed to the performance of Arbitrum One, a mainnet of the Arbitrum protocol. At the time of writing, the protocol had managed to surpass 200 million in transactions.
🎉 Arbitrum One has reached the milestone of 200 million transactions!
We appreciate all the builders and communities who made this possible in such a short time.
Let’s keep building Arbitrum together.💙🧡 pic.twitter.com/GDEJc68ysM
— Arbitrum (💙,🧡) (@arbitrum) April 20, 2023
The increased use of the Arbitrum protocol has resulted in a commensurate increase in the total value captured in its smart contracts. Furthermore, Artemis’ data indicated that, other than Ethereum, the project had surpassed most protocols in this regard, with a registered TVL of $2.2 billion at the time of writing.
Developers are taking a backseat
While there was a lot of activity on Arbitrum’s protocol, the same couldn’t be said for its GitHub. For example, according to data from Token Terminal, the number of active developers on the network has dropped significantly in recent months. Coupled with that, the number of code commits made on Arbitrum’s GitHub in the past 90 days also fell by 51.4%.
If this trend continues, Arbitrum may take longer than other protocols to introduce new features and upgrades. This would result in Arbitrum losing its reigning dominance.
Despite the protocol’s greater positive performance, sentiment around ARB has remained negative.
Consider this: Santiment’s data indicated that weighted sentiment had turned massively negative in recent days. In tandem with this, the overall speed of the ARB token also dropped, implying that the frequency with which the token was traded had dropped.
Realistic or not, here is ARB’s market cap in terms of BTC
Due to the factors mentioned above, the price of ARB started falling in the charts.
This post Identifying the whys and hows of Arbitrum flipping Ethereum on this front
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