Is Optimism L2 moving towards displacing Arbitrum?

• Optimism offered lower fees for facilitating transactions when compared to Arbitrum.
• OP was the better performer when compared to ARB at the time of writing.

The fight for the crown jewel of Ethereum [ETH] layer-2 landscape has started to heat up. The two Optimistic rollups – Optimism [OP] and Arbitrum [ARB]- have been locked in a tense battle, with the former throwing up bigger challenges for the latter of late.

Realistic or not, here’s OP’s market cap in BTC’s terms

According to popular on-chain analytics firm IntoTheBlock, Optimism transactions hit their peak earlier this week on 16 August, eclipsing the largest L2 Arbitrum for the first time in 2023.

Source: IntoTheBlock

Optimism offers better savings than Arbitrum

In most cases, the number of transactions executed on the network have an inverse relationship with the transaction fees. The lower the fees, the greater the user preference for using the network for transactions.

According to data from L2Fees, Optimism offered lower fees for facilitating transactions when compared to Arbitrum. While it took $0.04 to send ETH on Arbitrum, Optimism required $0.03 to perform the same task. In terms of token swapping, Optimism turned out to be even better at $0.05, less than half Arbitrum’s rates.

In fact, after staying neck and neck, Optimism’s total savings from the base layer have surpassed that of Arbitrum in recent months. As per data from Dune, Ethereum users would save 97% if they switched to Optimism, compared to 94% if they opted for Arbitrum.

Source: Dune

The Bedrock upgrade introduced in June played a vital role in tilting the balance in Optimism’s favor. The enhancement primarily focused on lowering L1 prices, i.e., the cost of posting L2 transactions on the Ethereum base layer.

Bedrock’s influence was also seen in the steady increase in Optimism’s active addresses since June. In contrast, after the astronomical surge following its AirDrop, Arbitrum’s user activity has trended lower.

Source: Dune

How much are 1,10,100 OPs worth today?

OP in a better position than ARB

A similar tight battle was on display between the governance tokens of the two L2s. ARB had a market cap of $1.28 billion at the time of writing, while OP was not too far behind at $1.05 billion, per CoinMarketCap.

However, given the bearish mood of the market, it was fascinating to note that OP was up 3.27% in the last 24 hours. Its weekly losses were likewise low in comparison to the rest of the market, at 6.07%. Contrary to this, ARB recorded double-digit losses of nearly 13% over the past week.