Arbitrum, the leading rollup scaling solution for the Ethereum blockchain, is close to its all-time high for the amount of ETH held in its smart contracts.
“Arbitrum has made a lot more progress in decentralizing/securing their L2,” Paul Vaden, a core contributor at derivatives trading platform Lyra, wrote to Unchained on Telegram. “So, for people who want to move to a safe battle-tested L2, Arbitrum is the obvious choice.”
Users bridge their ether to Arbitrum for a variety of reasons. For example, users may want to trade on protocols based only on Arbitrum such as GMX, transact with lower costs compared to Ethereum, or experiment with Arbitrum’s technology stack.
Arbitrum holds nearly 4.5 million ETH in its smart contracts, a 13% increase in the past 30 days and a 104% jump in the past year. Optimism, Base, zkSync Era, and Linea’s combined amount of ETH is less than Arbitrum’s figure, data from layer 2 analytics website growthepie.xyz shows.
Arbitrum reached an all-time high of more than 4.5 million ETH in its smart contracts roughly three weeks ago on January 5.
Rollups, considered scaling solutions for Ethereum, aim to optimize transaction speed and cost efficiency for users by moving computation off-chain and bundling a collection of transactions before posting them to Ethereum’s base layer.
The main Arbitrum bridge currently holds more than 1.4 million ETH, making it the sixth-largest holder of ETH, behind Ethereum’s staking deposit contract, the smart contract for wrapped ETH, one Binance wallet, one Kraken address, and Robinhood.
The number of ETH in this Arbitrum bridge has more than doubled in roughly the past five months from about 700,000 in Sept. 2022, data from blockchain explorer Etherscan shows, highlighting how people have been increasingly moving their ETH from Ethereum’s base layer to Arbitrum’s layer 2.
Disclosure: Arbitrum is a sponsor for Unchained.