Arbitrum Co-Founders Eye Layer-2 Growth via DeFi and Gaming – Global Village Space

As we enter March, the Ethereum layer-2 space is experiencing strong demand with one of its largest scaling solutions, Arbitrum, seeing exponential growth in subsectors of the ecosystem. While base blockchains, also known as layer ones or L1s in the crypto world, remain the foundation of the web3 landscape, technology built on top, such as layer two chains or L2s, are rapidly expanding. In fact, Arbitrum has surpassed the Ethereum chain it’s built on in terms of total transactions processed.

Arbitrum is an L2 Ethereum-focused scaling solution that aims to function like Ethereum but with faster processing times and lower transaction costs. It currently holds about 54% of the market share on Ethereum and has a total value locked (TVL) of around $3.38 billion, according to L2Beat data. The TVL is measured by the amount of tokens locked in all escrow contracts for an L2 and is near its highest point since May 2022.

L2 scaling solutions like Arbitrum, Optimism, Immutable X, StarkWare, and others are built on top of layer-1 blockchains like Ethereum. However, L2s operate in a faster and more cost-effective manner and reduce the burden on L1s by bundling transactions and only recording final results on the main blockchain. This approach prevents network congestion and ensures smooth operations.