Layer 2 solutions are built on top of a base blockchain (Layer 1, such as Ethereum) to enhance scalability and efficiency. They aim to handle a higher volume of transactions at faster speeds and lower costs by processing transactions off the main blockchain and then recording the final state on Layer 1. This helps alleviate congestion and reduces fees on the main blockchain.

Key benefits of Layer 2 solutions include:

Scalability, Cost Efficiency, Speed and Interoperability

ARBITRUM (ARB)

Arbitrum is a Layer 2 solution that enhances Ethereum smart contracts by improving their speed, scalability, and privacy. It allows developers to run unmodified Ethereum Virtual Machine (EVM) contracts and transactions on a second layer, while retaining Ethereum's robust Layer 1 security.

Optimism (OP)

Optimism is a Layer 2 scaling solution for Ethereum that enhances transaction throughput and reduces costs. It operates under a design philosophy of simplicity, pragmatism, sustainability, and optimism, aiming to improve the overall efficiency and affordability of transactions on the Ethereum network.

Base

Base Chain is an Ethereum Layer 2 blockchain network developed by Coinbase. It aims to enhance scalability, performance, and interoperability, while also reducing transaction costs and settlement times on the Ethereum network.

Analysis of Arbitrum, Base, and Optimism

This analysis focuses on the first half of the year 2024.

• Transactions: Analyzed the number of unique transactions over the first half of 2024.

• Transfer: Analysis of Token Transferred, volume and fees

• Bridges: Assessed the amount bridged in USD and the number of unique users participating in bridging activities.

• DEX Swaps: Evaluated distinct swappers and the total amount swapped in USD.

• NFT Sales: Investigated total NFT sales volume, distinct NFT sales, and fees.

• TVL: Examined the Total Value Locked (TVL) trends over time.