What is Ethereum?

Ethereum is the second largest crypto in terms of market cap only to Bitcoin, and the largest proof of stake network. Ethereum is the largest decentralized blockchain with support for smart contract. They are the host to all "ERC-20" tokens, such as Doge, Polygon, and Decentraland. Ethereum was the first major blockchain to support smart contract, in addition to being one of the first to run a proof of stake network. Although the transition from proof of work took slightly longer than expected, users with greater than 32 ETH are able to stake their coins.

What is Optimism?

Optimism is a side chain that allows Ethereum to run faster. It is a layer 2, similar to Polygon, that runs along the side of Ethereum. It can support all the same Dapps, and is perfectly compatible with each Dapp on the Ethereum network. Optimism reports that as of a year ago, they have saved users $10 million in gas fees across 100,000+ individual transactions

How does it work?

The Optimism side chain allows multiple transactions to be put in a singular block on the Ethereum network. Optimism is considered a rollup- a rollup is where a layer 2 takes transactions that would typically be put directly to the main chain, and writes them to its own series of blocks. The optimistic rollup is said to take an entire week to upload their block to the Ethereum mainnet. A week is a long time for a block to be sitting in purgatory, but the rollup claims to handle a greater amount of transactions per second than the mainnet, which will increase speeds and lower transaction costs.

Methodology

==This dashboard will cover metrics across all of the following networks, during the month of July (1st-31st).== The goal of this dashboard is to explore network activity trends, in conjunction with its layer 2 competitor, Arbitrum, and how it relates to their native layer 1, Ethereum.

• Optimism
• Arbitrum
• Ethereum

==The metrics will include==

• Transaction count
• Fees charged
• Sales volume in ETH
• Average ETH per transaction
• Cumulative volume in ETH
• Max transaction per day

==These metrics will cover daily metrics, as well as a pile of individual statistics.==

Transaction count by chain

• The stacked bar above shows the transaction count by layer, over time
• Clearly and obviously, the main Ethereum network dominates the traffic
  • On the busiest day in terms of total transaction volume, Ethereum main net has over 15x more volume than Optimism, and nearly 20x that of arbitrum
• Over the month of July, there was no real trend of increasing or decreasing overall volume
• This implies that the month of July was relatively uniform in volume, likely a function of the bear market

Transaction count by chain- Statistics

• Over the course of July, Ethereum has 11x the transaction volume of Optimism, and nearly 13x that of Arbitrum
• Even though the gas fees are so much larger on Ethereum, the layer 2s still not have taken off
• This is likely a reflection of the bear market, and users not wanting to experiment with their funds
• Overall, Ethereum even with the high fees, is still the preferred network by volume

Ethereum Fee Amounts by chain

• Compared to the main net, Arbitrum and Optimism might as well be free
• Ethereum regularly has 1000x the amount in fees compared to the pair of layer 2s
• ==This is most obvious on days of high volume where the Ethereum fees are disproportionately higher than the layer 2s==
• That said, the higher fees on Ethereum make sense- and they are the reason that layer 2s have a role to play in the crypto verse at all

Ethereum Fee Amounts by chain- Statistics

• To no surprise, Ethereum has the most transaction fees charges, and by a massive amount
• This visual really brings to life the cost of actually using the Ethereum network, at least when performing transaction on the main net
• The layer 2s appear to be working quite well, as they each have significantly lower tx fees in ETH
• Again, these values are in ETH, not USD

Amount in ETH over time

The amount in ETH- Analysis

• Over time, the transaction counts per day are relatively volatile
• Especially when compared to the number of transactions which are fairly stable, the actual amount in ETH being transacted is highly volatile
• That said, the amount per network tells an interesting story
• ==Even with all of the transaction fees, users are still choosing to send a majority of their money through main net==
  • This likely has to do with uneven consumer knowledge, and a general distrust in the community
  • This distrust likely stems from the prices during the bear market
  • In rough times, consumers tend to be more cautious with their spending
• Similar to their near parity in terms of transaction count, the amount they are passing through in ETH is also quite similar

Average value in ETH per transaction over time

Average ETH volume- Analysis

• The first thing that stands out when analyzing the graph, is the large average transaction size on the Ethereum network compared to the others
• The average tx volume on Ethereum was over 30x that of both Arbitrum and Optimism
• ==However, on peak days, that figured dropped closer to 10x==
  • ==This is incredibly important, because it means on the high volume days, users are seeking out ways to lower their gas fees, and are doing so successfully by utilizing layer 2s==
• This trend is also an interesting one to look at over time, as the total fees collected appear to creep closer to each other
• This implies that over the course of July, users were actively switching over to the layer 2s when looking to perform large scale swaps

Unique Senders Over Time

Unique Senders- Analysis

• Right off the bat, it is clear that there is no pattern of increasing or decreasing unique senders by day, throughout the month of July
• This means that over the course of the month, no more or less users decided for/against using the network
• ==Surprisingly, Arbitrum had nearly double the number of unique users over the month of July compared to Optimism==
  • ==This is surprising, because the number of transactions and the amount being transacted were extremely similar to each other==
• July 26th was an interesting day, as it was the only true outlier in the data
  • It had nearly double the number of unique senders compared to a majority of the days in July
  • On this day, the crypto market was hit hard by low demand, and therefore low prices across the board

Max ETH Transactions and Cumulative Volume Over Time- Analysis

• The first graph shows the maximum ETH transfers by blockchain over time
  • The size of the dot is proportional to the number transactions on that network, on that day
• Unsurprisingly, the chain with the largest maximum sizes was Ethereum
• Again this is likely due to the larger amount of faith in the network, and users transacting large sums of money are the ones who want to make sure it is safe/secure
• ==As for the cumulative volume, it does appear that both Arbitrum and Optimism are gaining users at an increasing rate==
  • This is excellent news for the health of the network, as it shows more and more activity is passing through the networks, and it’s growing

Summary of Key points

• The stacked bar above shows the transaction count by layer, over time

• Clearly and obviously, the main Ethereum network dominates the traffic

  • On the busiest day in terms of total transaction volume, Ethereum main net has over 15x more volume than Optimism, and nearly 20x that of arbitrum

• Over the month of July, there was no real trend of increasing or decreasing overall volume

• ==This implies that the month of July was relatively uniform in volume, likely a function of the bear market==

• Over the course of July, Ethereum has 11x the transaction volume of Optimism, and nearly 13x that of Arbitrum

• Even though the gas fees are so much larger on Ethereum, the layer 2s still not have taken off

• This is likely a reflection of the bear market, and users not wanting to experiment with their funds

• Overall, Ethereum even with the high fees, is still the preferred network by volume

• Compared to the main net, Arbitrum and Optimism might as well be free

• Ethereum regularly has 1000x the amount in fees compared to the pair of layer 2s

• ==This is most obvious on days of high volume where the Ethereum fees are disproportionately higher than the layer 2s==

• That said, the higher fees on Ethereum make sense- and they are the reason that layer 2s have a role to play in the crypto verse at all

• To no surprise, Ethereum has the most transaction fees charges, and by a massive amount

• This visual really brings to life the cost of actually using the Ethereum network, at least when performing transaction on the main net

• The layer 2s appear to be working quite well, as they each have significantly lower tx fees in ETH

• Again, these values are in ETH, not USD

• Over time, the transaction counts per day are relatively volatile

• Especially when compared to the number of transactions which are fairly stable, the actual amount in ETH being transacted is highly volatile

• That said, the amount per network tells an interesting story

• ==Even with all of the transaction fees, users are still choosing to send a majority of their money through main net==

  • This likely has to do with uneven consumer knowledge, and a general distrust in the community
  • This distrust likely stems from the prices during the bear market
  • In rough times, consumers tend to be more cautious with their spending

• Similar to their near parity in terms of transaction count, the amount they are passing through in ETH is also quite similar

• The first thing that stands out when analyzing the graph, is the large average transaction size on the Ethereum network compared to the others

• The average tx volume on Ethereum was over 30x that of both Arbitrum and Optimism

• ==However, on peak days, that figured dropped closer to 10x==

  • ==This is incredibly important, because it means on the high volume days, users are seeking out ways to lower their gas fees, and are doing so successfully by utilizing layer 2s==

• This trend is also an interesting one to look at over time, as the total fees collected appear to creep closer to each other

• This implies that over the course of July, users were actively switching over to the layer 2s when looking to perform large scale swaps

• Right off the bat, it is clear that there is no pattern of increasing or decreasing unique senders by day, throughout the month of July

• This means that over the course of the month, no more or less users decided for/against using the network

• ==Surprisingly, Arbitrum had nearly double the number of unique users over the month of July compared to Optimism==

  • ==This is surprising, because the number of transactions and the amount being transacted were extremely similar to each other==

• July 26th was an interesting day, as it was the only true outlier in the data

  • It had nearly double the number of unique senders compared to a majority of the days in July
  • On this day, the crypto market was hit hard by low demand, and therefore low prices across the board

• The first graph shows the maximum ETH transfers by blockchain over time

  • The size of the dot is proportional to the number transactions on that network, on that day

• Unsurprisingly, the chain with the largest maximum sizes was Ethereum

• Again this is likely due to the larger amount of faith in the network, and users transacting large sums of money are the ones who want to make sure it is safe/secure

• ==As for the cumulative volume, it does appear that both Arbitrum and Optimism are gaining users at an increasing rate==

  • This is excellent news for the health of the network, as it shows more and more activity is passing through the networks, and it’s growing

Max ETH Transactions and Cumulative Volume Over Time