INTRODUCTION
Layer-2s have gained more traction in recent times due to Ethereum’s high gas fees and slow transaction speed. To curb the issues of high gas fees and slow transaction speed, Layer 2 networks are built on top of an existing blockchain (Layer 1, Ethereum mainnet in this case).
Layer 2 solutions aim to eliminate the issues of high gas fees and long or slow transaction processing time. Scalability, efficiency, lower gas fees, faster transaction speed, security, and privacy have been maintained since the inception of L2s.
With Uniswap being the largest decentralized exchange (DEX) on the Ethereum blockchain, this is an analysis of the trading and user activity on the Arbitrum, Optimism, and Base Layer-2 blockchains through Uniswap.
I: Overview
The total volume that has come into Uniswap via the Arbitrum, Optimism, and Base chains includes:
Arbitrum - $9.1b
Optimism - $865m
Base - $169.2m
The volume on each chain per day averages:
Arbitrum - $28m
Optimism - $292.4m
Base - $5.5m
Trading Volume
On November 9th, there was a significant peak in trading volume for all three chains. Arbitrum was leading with $620.739m; Optimism and Base followed suit with $88.257m and $13.44m, respectively.
Transaction Count
Due to the peak in trading volume on November 9th, the transaction count also spiked, with Arbitrum having 397k transactions, Optimism with 142k transactions and 26.9k
II: Swaps
The number of swaps on the Arbitrum chain maintains a consistent lead compared to the optimism and base chains. This can be a result of users finding swaps easier and faster with Arbitrum.
Still, due to Ethereum's increased trading volume on November 9th, the number of swaps in Arbitrum, Optimism, and Base also had a significant spike on this day, with Arbitrum having 151k swaps, Optimism having 37.3k, and Base having 8.23k swaps.
Swaps performed on a platform
For the number of swaps performed on a platform, Arbitrum emerges with the highest number of swaps performed on a platform, with 2.659M swaps, and Optimism and Base follow with 592k and 197k, respectively.
This data shows that users find the Arbitrum network faster and more effective to perform swaps on.
Top tokens traded by number of swaps
On all three chains, wrapped Ethereum (WETH) is the top traded token. This is a result of the standardization and trustless tokenization of Ether, which makes it a secure token for trading on DEXes.
USER ACTIVITIES
The user activities on Uniswap across 3 major L2s have been analysed and visualised in this dashboard.
The data revealed that Uniswap users largely come from the Arbitrum Ecosystem. The number of Uniswap users coming from Arbitrum increased to 191k on March 20, 2023, for the first time in 2023 and has slightly fallen over time to 10.6k
New Users
This data reveals that from December 15th to February 16th, Optimism was in the lead when it came to onboarding new users. By the end of February, Arbitrum took the lead and maintained a high-raised steady number of new users.
With the launch of the Base network in August, the number of users took a slow, steady number of 1, 10, and 8 before reaching a peak of 1.82k users on September 7th.
Fast forward to September 21st, and Base had a massive onboard of 12.3k users, with Arbitrum and Optimism falling with 2.41k and 3.27k, respectively.
It’s safe to say the month of September was a month of onboarding new users on Base, as the number was on the increase compared to the Arbitrum and Optimism networks.
Retained Users
User retention is very important for any project as it shows customer satisfaction when interacting with a blockchain.
The data reveals that from December 2022, Optimism had a consistently higher percentage of retained users, but not for too long. Arbitrum took over and led in the percentage of retained users, but the retention rate slowly declined in February, giving Optimism the lead again.
Fast forward to August 31st, when Base was launched, and the network immediately took a greater percentage of the retention rate of users. This steady higher retention has been steadily maintained through the months until the present, November 2023.
GAS COSTS
Gas costs for users on Uniswap via the top 3 Layer-2s have been analyzed and visualized on this dashboard.
The data ranging from September 20th, 2023 to November 19th, 2023, reveals that optimism has an evidently higher cost of gas fees for transactions. The cost of gas fees on the Arbitrum network is average, but overall, Base has the lowest gas fee.
In cases like October 23rd,2023, Arbitrum recorded a total of 25.203 ETH in gas fees, Optimism recorded 83.515 ETH, and Base recorded 4.505 ETH, which is evidently lower compared to the other chains.
On the peak of transactions in the Ethereum blockchain (November 9th), Optimism recorded a total of 75.615 ETH in gas fees; Arbitrum followed closely behind with a total of 65.499 ETH; and once again, Base fell significantly lower with 5.148 ETH in gas fees.
The consistently low rate of gas fees on Base can also be one of the reasons for a higher retention rate on the network.
Average Gas Paid Per Transaction
According to the data we have on flipside, Optimism cost more gas fee per transaction than Arbitrum and Base on Uniswap. As at 1st of November, 2023, Average gas fee on Optimism was 0.515244 while Arbitrum and Base was 0.255244 and 0.229513 respectively.
TOKEN LISTING
This dashboard analyses the number of pools created on each of the top Layer 2 networks.
Based on this data, Arbitrum boasts a far larger number of pools created, with 285 pools created compared to Optimism and Base Network, with 141 and 107 pools created, respectively.
Arbitrum's boasting of more pools is due to the fact that the chain offers users the best prices to execute trades, eliminate slippage, and improve liquidity.
CONCLUSION
The analysis and visualisation of the Arbitrum, Optimism, and Base Layer 2 networks would be concluded and categorised in three:
Trading and User activities
The arbitrum chain has an overall higher trading volume than the two other L2s. This is a result of a higher number of active users on the chain.
Retention rate
Base which is a relatively new chain has a higher retention rate. Despite the fact that active users on a chain is important, if users are satisfied with the experience on the chain, there’s a higher rate of them staying active on the chain.
Token Listing
Analysing based on tokens and pools created, Arbitrum ranks the highest due to the fact that the chain provides better prices for traders, reduces slippage and improves liquidity.
Base is a new chain but in no time, the chain is sure to catch up with top layer 2s seeing from our analysis. The main reason for layer 2s which is eliminating high gas fees and increasing transaction speed has so far been established on the chain.
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