The three protocols are fighting for control of the Ethereum Layer 2 market and its $52 billion worth of so-called distributed finance (DEFI): Arbitrum (ARB), Optimism (OP), and Base.
Bullish investors see an opportunity for Layer 2 to replace some of Ethereum’s $220 billion market capitalization, as well as alternative blockchain values like Solana and Avalanches.
Something like a misnomer, “Layer 2” makes transactions cheaper and faster on Layer 1 blockchain, while Layer 2 is basically a separate blockchain that exposes data to the base blockchain.
Arbitrator and Optimism They were two major competitors, and their ratings remained closely matched. Despite a highly diverse approach, both ARB and OP trade within 5% of a fully diluted valuation of $3.2 billion.
In contrast to arbitrum and optimism, the base is Layer 2 incubated in a company that does not have native tokens. Instead of the initial coin supply (ICO) or airdrop, the base financially rewarded the company’s founder Coinbase with savings in transaction fees.
Base has used social media followers to promote various derivative projects that issued tokens themselves, such as Zora (Zora) and Baseisforeveryone.
Optimism
Optimist growth strategies rely on a variety of corporate partnerships, licensing and white-labeling technologies for partners like bases.
Many optimistic agreements have revenue kickbacks that benefit token holders, but contain a variety of contractual provisions that can make planning for the OP’s long-term value.
The lead investigator at Delphi Digital described the optimistic main chain as a “trend to ghost towns.” To counter decline, optimism says so We are working on app super chain interoperability.
It boasts major partnerships including Uniswap, Curve Finance and Aave.
Despite using optimistic technology, Base is a direct competitor that rewards far more Coinbase than its OP token holders.
Arbitrator
In contrast to optimism, Arbitrum retains most of its liquidity in its main blockchain. Unlike the flashy business partnerships and off-chain transactions of optimism, almost all of Arbitrum’s revenues are directly attributed to ARB token holders.
Arbitrum maintains liquidity on the chain rather than off-chain partnerships, so Defi trackers are easier to estimate total value lock (TVL). Most estimates place the amount of crypto assets in the arbitrum blockchain $2.3 billion.
Arbitrum’s Bridged TVL, which includes double counts of various crypto assets across the blockchain, exceeds $11 billion.
To continue growing, Arbitrum also encourages additional chain trajectories to operate its own transaction sequencer. These track chains hold some assets as they are filled with liquidity from the Arbitrum main chain.
Read more: Coinbase claims that the token base you just launched is not actually a token at all
base
Coinbase supports the bases of approximately $3 billion for TVL and $14 billion for Bridged TVL. The basics are that you charge less than a cent trading fee, far below Ethereum or Solana.
Even the low rates it claims, chain fees collected over the 24-hour period reached millions of dollars for several days from late March to early April 2024.
Establishing Optimism’s OP stack connections brings some overlap between Arbitrum’s competing liquidity and apps that are essentially built on Uniswap.
