Arbitrum One, one of the layer-two rollup networks for Ethereum, has started seeing significant growth over the past week. Its total value surged by around 2,300% to finish at $1.5 billion. According to an analysis platform that compares layer-two protocols, L2bear, the TVL of this network went on to tag an all-time high of $1.5 billion on the 11th of September as the degens of the DeFi sector rushed to start investing in early farming DApps which would be launching on this network.
There were off-chain Labs that initially launched this network to mainnet after it followed funding of $120 million round on the 31st of August. Since then, the transaction fees of Ethereum have increased to near-record levels which have driven migration of liquidity to layer-two scaling solutions, along with rival layer-ones.
Arbitrum Has Gained Major Traction
Currently, Arbitrum holds around 65.7% of all locked capital on layer-two networks, which is followed by dYdX- a second-layer decentralized exchange- with around 14.6%. Much of the growth of this network can be attested to the ArbiNYAN yield farm, which managed to lure investors with their multi-thousand percentage returns for bringing forth its native token. However, there has been bullish sentiment which has surrounded ArbiNYAN, which appears to be pretty short-lived, with the native token going more than 90% of its value within 12 hours.
Even though the hype for ArbiNYAN has died down pretty fast, the liquidity migration onto Arbitrum has definitely affected the wider ecosystem of DeFi. One savvy farmer has duly noted that the withdrawal of around 200,000 Ether from the stETH pool of Curve since the launch of ArbiNYAN has created an arbitrage opportunity through slippage. One significant share of the capital flowing through this network has also appeared from the Solana– the so-called Ethereum Killers.