Abstract
Ethereum’s scalability challenges have spurred the rise of Layer-2 (L2) solutions, enabling faster and cheaper transactions. Key players like Arbitrum and Optimism (both Rollup-based) debuted in 2021, while Coinbase’s Base (zkEVM-powered) entered the scene recently. This analysis compares these L2 networks across three critical metrics—Reach, Retention, and Revenue—leveraging data from Covalent’s Increment tool.
Reach
Active Addresses
- Arbitrum dominates with the highest active addresses, peaking in May 2024.
- Base surged in March 2024 but remains behind Arbitrum.
- Optimism shows slower growth comparatively.
Transaction Count
- Base leads in recent months (highest transactions), fueled by new users.
- Arbitrum holds the overall six-month record.
Smart Contract Creation
- Base tops this metric, reflecting developer interest in its nascent platform.
- Arbitrum and Optimism exhibit steady but slower growth.
DEX Activity
- Base: Limited to Baseswap (single DEX).
- Arbitrum/Optimism: Diverse activity, with Uniswap capturing 88% and 99% of transactions, respectively.
Reach Conclusion:
Arbitrum leads in reach, but Base’s rapid growth signals strong competition. Optimism lags behind both.
Retention
Analysis of Daily Active Users (DAU) and Monthly Active Users (MAU) over six months:
| Network | Peak DAU | Peak MAU | Month |
|---|---|---|---|
| Base | 350K | 4M | April 2024 |
| Arbitrum | 650K | 5.5M | May 2024 |
| Optimism | 130K | 2.4M | April 2024 |
User Activity Trends:
- Base/Optimism peaked in April.
- Arbitrum hit record highs in May (projected).
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Revenue
Key Metrics:
Average Fees (May 2024):
- Arbitrum: $0.005
- Optimism: $0.0278
- Base: $0.032
Revenue & Gross Profit:
- Base: $10M weekly (peak); ~$30M annual gross profit.
- Arbitrum/Optimism: ~$9.5M each.
Conclusion:
Base leads in profitability (3x higher), despite higher fees. Arbitrum remains cost-efficient for users.
FAQ
1. Which L2 has the lowest fees?
Arbitrum currently offers the lowest transaction fees ($0.005).
2. Why is Base’s revenue higher despite fewer users?
Base’s zkEVM technology and Coinbase backing drive higher transaction volumes and developer adoption, boosting revenue.
3. How does Optimism compare in retention?
Optimism shows steady but lower retention vs. Base and Arbitrum, peaking at 130K DAU.
4. What’s the long-term outlook for these L2s?
Base’s profitability and Arbitrum’s cost-efficiency make them strong contenders. Optimism needs innovation to compete.
5. Are L2 revenues sustainable?
Yes, revenue-sharing with Ethereum ensures operational sustainability, with Base currently leading in gross margins.
Final Verdict:
While Arbitrum wins on cost and reach, Base’s revenue dominance positions it as a formidable rival. The L2 war is far from over!