Comparing Arbitrum and EigenLayer: A Deep Dive into Layer 2 Solutions (2024)

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Comparing Arbitrum and EigenLayer: A Deep Dive into Layer 2 Solutions? ›

In summary, Arbitrum and EigenLayer represent significant advancements in the Layer 2 landscape, each with its unique focus and contributions. While Arbitrum leads the way in scalability and efficiency, EigenLayer introduces innovative approaches to security and validator economics.

Advancing Ethereum's Scaling Solutions: EigenLayer supports the scaling of Layer 2 solutions by providing a secure foundation. Consequently, this accelerates the development and adoption of scaling technologies, thus potentially increasing the throughput of Ethereum and reducing transaction costs.

Arbitrum is a layer 2 scaling solution that reduces congestion and high transaction fees on the Ethereum network by moving computation and data storage off-chain. Utilizing optimistic rollups, Arbitrum executes transactions off-chain and then posts the results onto the Ethereum mainnet.

L2 solutions process transactions off-chain and then batch them together for settlement on the base layer, enabling faster and cheaper transactions. This approach enhances overall blockchain scalability, addressing issues like network congestion and high fees faced by Layer 1 networks such as Bitcoin and Ethereum.

1. Arbitrum. Arbitrum, built on Optimistic Rollups, boasts a peak throughput of 4,000 TPS, processing transactions up to 10x faster than Ethereum's mainnet and reducing gas costs by up to 95%. As of January 2024, Arbitrum commands over 51% market share among Ethereum Layer-2 networks in terms of TVL.

Unlike Arbitrum, where transaction fees are also processed in its native token, Optimism distinguishes itself by utilizing ETH for transaction fees, reserving OP exclusively for governance and security purposes.

EigenLayer is a protocol built on Ethereum that introduces restaking. This is a new onchain primitive similar to rehypothecation, allowing either natively staked ETH or Liquid Staking Tokens (LSTs) to be restaked in return for additional yield.

Since liquid staking eliminates the 32 ETH minimum staking requirement, it allows small-stake holders to pool their assets with other users and potentially enables them to benefit from staking rewards.

It has circulating supply of 0 EIGEN coins and a max supply of 1,673,646,668 EIGEN alongside - 24h trading volume.

Does arbitrum have a future? ›

Arbitrum Overview

Our real-time ARB to USD price update shows the current Arbitrum price as $0.516278 USD. Our most recent Arbitrum price forecast indicates that its value will increase by 11.96% and reach $0.578007 by September 11, 2024.

Arbitrum is a technology suite designed to scale Ethereum. You can use Arbitrum chains to do all things you do on Ethereum — use Web3 apps, deploy smart contracts, etc., but your transactions will be cheaper and faster.

One such solution is Arbitrum, a layer 2 solution designed to enhance transaction throughput and reduce fees while leveraging Ethereum's established security and decentralization.

Examples of Layer-2 scaling solutions include state channels, sidechains, Plasma, rollups, and other off-chain scaling techniques that enable faster and more cost-effective transactions by processing transactions off-chain or via secondary protocols.

In summary, Layer 2 scaling solutions offer compelling benefits in terms of scalability, cost-efficiency, transaction speed, privacy, security, and compatibility. These benefits empower blockchain networks to support a wider range of applications and use cases, driving innovation and adoption across industries.

Layer-2 or second-layer solutions increase the throughput and transactions per second of a blockchain by creating additional blockspace or recording transactions in a more efficient manner. Examples include Plasma, TrueBit, Lightning Network and more.

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Common types of Layer-2 solutions on Ethereum include optimistic rollups and Zero-Knowledge rollups (ZK rollups). Optimistic rollups and ZK rollups are considered secure, as they inherit the Ethereum mainnet's security.

Layer 2 - A Scalability Solution

The Ethereum community has turned to Layer 2 solutions to address these challenges. These are networks (or technologies) built on top of the Ethereum blockchain, designed to increase its capacity without compromising security.