HomeCryptocurrency NewsDeFi On Arbitrum Blowing Up: Will They Compete With Polygon?

DeFi On Arbitrum Blowing Up: Will They Compete With Polygon?


In the growing battle for supremacy between Ethereum scaling solutions, Arbitrum, an optimistic rollup, is quietly making major moves.


  • What is Arbitrum?
  • Dominating rollup market share
  • DeFi TVL reaches top 10

What Is Arbitrum?

The Layer-2 race for TVL is heating up, and Arbitrum is coming hot on the heels of Polygon. Arbitrum is a more recently launched Ethereum Layer-2 scaling solution, using a solution called Optimistic Rollups. The protocol is able to “rollup” multiple transactions into one and thus scale Ethereum.

Vitalik has dubbed rollups as the most optimal and secure way to scale Ethereum. Mainly because, unlike sidechains, they inherit the native security of Ethereum. They do not have their own set of validators. Arbitrum can handle more than 40,000 transactions per second at a minimal gas cost.

Because of this, since their mainnet launch in September, Arbitrum is currently exploding in use. For example, Tornado Cash, a popular Ethereum privacy protocol, announced a couple of weeks ago they are deploying on Arbitrum.

Recommended: Polygon Announces 400 Million Deal With MIR Protocol; Forms Polygon Zero

Arbitrum: Dominating Rollup Market Share

As of Dec 7th, they are dominating the Layer-2 rollup scaling battle, accounting for more than 41% of the total market share with over 2.45 billion in TVL.

credit: cryptomode.com

With those numbers, Arbitrum is quickly creeping up on the most dominant Eth scaling solution, and that is, of course, Polygon. However, Polygon is a sidechain, not a rollup, so they are evaluated differently. But regardless, Polygon’s sudden and intense embrace of rollups is certainly insightful in light of Arbitrum’s recent success. 

Arbitrum already supports dApps like Uniswap, 1inch, Aave, Balancer, Curve, and MakerDAO. The unique addresses on Arbitrum have also skyrocketed since launch, as seen below. According to nansen.ai, “50% of ETH Millionaires ($1 million USD or more) that use Ethereum use Arbitrum too.”

credit: nansen.ai

Arbitrum: DeFi TVL Is Already Top 10

The main reason the hype around Arbitrum has not really reached the masses is likely because they do not have a token yet. Not to mention, Arbitrum just recently cracked the top 10 of total-value-locked of all blockchains, sitting right behind Polygon.

credit: defillama.com

The recent change for the last week in TVL on defillama.com shows that projects running on Arbitrum are doing very well. In fact, the #1 ranking project in terms of TVL growth in the last 7 days is a DeFi project running solely on Arbitrum: Umami Finance.

CAP and Pods Finance, which are both built on Arbitrum, are doing extremely well in growth this week. They recently just published an article called Optimistic rollups are the present *and future* of Ethereum scaling.” It is very insightful if you seek to learn more about Artbitrum and has been making its way around Twitter as rollups continue to blow up.

Mark Cuban and Pantera Capital are also backers of the protocol, so they have some heavy hitters behind them. And while they don’t have a token, if anything, this should make you very bullish on Ethereum. Because rollups are not a band-aid, they are highly complex scaling solutions that are basically bulletproof in terms of security and ultra-scalable.

Polygon may be given a run for its money in the near term, especially when Arbitrum launches its own native token.

Note: keep an eye out on Cryptosrus.com for an article explaining how to use Arbitrum.

Recommended: Why Sam Bankman-Fried Says Solana Will Beat Ethereum To Adoption

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