Ethereum Layer-2 Tokens Flip: Arbitrum Market Cap Slips Below Optimism

The market caps of two leading Ethereum layer-2 tokens flipped during Monday’s negative crypto price action. Arbitrum slipped below Optimism, affecting their market rankings and trading prices.

Posted 7 months ago in Ethereum

Two Ethereum layer-2 tokens flipping over a chart representing market capitalization.

The market caps of two leading Ethereum layer-2 tokens flipped during Monday’s negative crypto price action.

Monday’s sell-off caused the market cap of Arbitrum to slip below that of rival project Optimism.

Arbitrum’s governance token ARB dropped to a new all-time low of $0.745, according to data from CoinGlass, while Optimism’s OP token gained 6.8% in the past 24 hours to trade at $1.33.

Currently, ARB has recovered some of its losses and is trading at $0.782, at par with yesterday’s price.

The flipping of the two projects’ market caps occurred due to considerable liquidations of ARB long orders. CoinGlass data shows $2.2 million longs were liquidated on Sept. 11, levels not seen since August’s market volatility.

The bullish hype prior to the liquidations can be attributed to PlutusDAO’s introduction of an ARB staking on Sept. 9.

Notably, the total market caps of Arbitrum and Optimism layer-2s are separated by just $66.9 million, with both holding around $1 billion.

Fundamentals remains unchanged

The number of transactions and daily addresses interacting on Arbirum and Optimism has remained consistent since the start of September, with Aribtrum total transacting continuing to lead Optimism, according to a Dune by pseudonymous data analyst @mslib7.

It suggests that the price surge was primarily due to the futures liquations. Optimism’s transactions surpassed Arbitrium during the hype around the launch of global ID project Worldcoin, which is Optimism's infrastructure. However, they slipped back below Arbitrum's transactions as the hype around Worldcoin faded.

According to DeFiLlama, the total value locked (TVL) in applications on the two protocols has been on a downward trend. However, there haven't been significant moves to outperform each other. Arbitrum’s TVL of $1.67 billion stands at more than 2.5 times that of Optimism's TVL at $0.63 million.

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Last updated 9/12/2023, 8:50:51 PM


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