Introduction

What Is Arbitrum?

Arbitrum is a layer 2 solution designed to improve the capabilities of Ethereum smart contracts — boosting their speed and scalability, while adding in additional privacy features to boot.

The platform is designed to allow developers to easily run unmodified Ethereum Virtual Machine (EVM) contracts and Ethereum transactions on a second layer, while still benefiting from Ethereum's excellent layer 1 security.

It’s built to address some of the shortcomings of current Ethereum-based smart contracts — such as poor efficiency and high execution costs — which have damaged the Ethereum user experience and frequently make transacting an expensive task.

Arbitrum uses a technique known as transaction rollups to record batches of submitted transactions on the Ethereum main chain, and execute them on a cheap, scalable layer 2 sidechain while leveraging Ethereum to ensure correct results. This process helps to offload most of the computational and storage burden Ethereum currently suffers from, while enabling new classes of powerful layer 2-based DApps.

New York-based development firm Offchain Labs is currently building the Arbitrum product, as well as an entire suite of scaling solutions. The initiative is spearheaded by Offchain Labs co-founders Ed Felten, Steven Goldfeder and Harry Kalodner. Ed is a professor, Steven received his Ph.D, and Harry is a Ph.D. candidate at Princeton University. All three are blockchain experts with a passion for making cryptocurrencies more capable.

How Does Arbitrum Work?

Arbitrum is a type of technology known as an optimistic rollup. It allows Ethereum smart contracts to scale by passing messages between smart contracts on the Ethereum main chain and those on the Arbitrum second layer chain. Much of the transaction processing is completed on the second layer and the results of this are recorded on the main chain — drastically improving speed and efficiency.

It’s optimistic in the sense that any validator is able to post a rollup block and confirm the validity of other blocks, while the term rollup is used to describe how public information can be used to reconstruct a complete history of the chain from an optimized log of events. The Arbitrum protocol ensures that code will run correctly (i.e. as intended) so long as any validator is honest, helping the network resist collusion and other forms of attack.

Future versions of Arbitrum will also have two other modes: channels and AnyTrust sidechains.

As with many blockchains, individual nodes can choose to participate in the Arbitrum chain. Validator nodes are involved in observing the state of the chain, and full nodes help to aggregate layer 1 transactions. Aggregators that submit transactions to the layer 1 chain earn rewards paid in ETH, while the rest of the user transaction fees are distributed to other network participants — such as validators.

Arbitrum introduces a challenge step for rollup blocks, which sees other validators check the correctness of a block and issue a challenge if they believe it is wrong. If the block is proven to be incorrect or a challenge is proven unjustified, the lying validator will have their stake confiscated, ensuring validators always play fair or risk the consequences.

The platform also has its own custom virtual machine, aptly named the Arbitrum Virtual Machine (AVM). This is the execution environment for Arbitrum smart contracts and exists above the EthBridge — the set of smart contracts that interfaces with the Arbitrum chain. Ethereum-compatible smart contracts are automatically translated to run on the AVM.

What Makes Arbitrum Unique?

The project is designed to provide an easy-to-use platform developers can use to launch highly efficient and scalable Ethereum-compatible smart contracts.

But it’s not the first platform looking to overcome Ethereum’s limitations, there are at least a dozen other solutions looking to offer similar functionality. So what separates Arbitrum from the rest? Well, it has several distinguishing features, including:

High EVM compatibility

Arbitrum is considered to be one of the most EVM-compatible rollups. It’s compatible with the EVM at the bytecode level, and any language that can compile to EVM works out of the box — such as Solidity and Vyper.

This makes it easy to develop on, since developers do not need to get to grips with a new language before building on Arbitrum.

Robust developer tooling

The team behind Arbitrum are doing what they can to minimize barriers to entry when it comes to building on their layer 2 solution. As such, they have produced comprehensive developer documentation for Arbitrum, and the developers can get started using existing tooling for Ethereum. There is no need to download anything specific to Arbitrum, such as plugins, or compilers like Hardhat or Truffle.

Low fees

As a layer 2 scaling solution for Ethereum, Arbitrum isn’t just designed to boost Ethereum’s transactional throughput, it also minimizes transaction fees at the same time.

Thanks to its extremely efficient rollup technology, Arbitrum is able to cut fees down to just a tiny fraction of what they are on Ethereum, while still providing sufficient incentives for validators.

Fairly launched

Arbitrum has run several testnets since October and is currently live on mainnet for developers. Unlike many other layer 2 scaling solutions, Arbitrum doesn't have its own native utility token — hence there was no token sale.

Moreover, all interested developers will have time to get up and running before Arbitrum opens to the masses, with Arbitrum recently pledging to give all 250+ development teams that applied to build on the developer mainnet at least two full weeks of development time before opening Arbitrum One to everyone.

Well-developed ecosystem

Arbitrum is already working with a wide variety of Ethereum DApps and infrastructure projects, including the likes of Uniswap, DODO, Sushi and dozens of others.

2- NEW COMMERS

Its always said that, If the transactions of a network is the blood of that main net, the new commers are new blood, so its very important for a platform to attract new users constantly.the following graphs show :

Daily / weekly new user count on Arbitrum
user retention
time difference between first and second transactions
first transactions situation compared to other transactions on Arbitrum
sectors by popularity in first transaction
10 popular platforms to interact in first transactions

Looking at the charts, except for the third week in the weekly chart which recorded a tremendous number of new users with over 150k, in the other weeks the number of new addresses was between 27 to 40 k users which is fairly good.
65% of users did their second transactions after their first ant actually, they have came back to the network to continue the journey!
56% of second transactions was ade in the same day of first transaction and 26% were done in the first week. so, it can be said that, most of secod transactions was made in the first week difference from first transaction.
20 to 30 % of every day transactions are related to first transactions and this is very good

3- STAKING

In this section , we will analyze :

daily number of stakers / unstakers
Daily Rewards value USD claimed by stakers & #claimers

Looking at the results :

Number of stakers has been higher than unstakers in the past two month which is a very good sign for Arbitrum as well.

4-Transaction Failure

Health of a platform’s transaction is one of the very important aspects of its technical fundamentals. So I decided to include a summary of Failed transaction and broke it down to sectors to get to know it better.

the metrics presented in this section are :

daily transaction status / total transaction status
transaction failure share by sectors
total failed transactions by sectors
daily failure rate by sectors
Arbitrum top 10 fee payers on failed txs

except for some few days June 15 to 22, which the daily transaction failure rate was about 20%, in the other days , that rate was fluctuating around 2 to 4 % which is a very significant rate
5.07% of total transactions made in Arbitrum in the last two month was failed and around 95 % was successful
in most of the days, the most of failed transactions are related to Dex sector, while on some days like June 27 - 30, Layer2 was responsible for most of the failed transactions
91% of failed transactions in total are related to dex sector!
you can also find the top 10 addresses which have paid the most of the fees for the failed transactions

Findings - section 1

looking at the results. the number of uniaue users and total daily transactions have been at its highest situations on the last quarter of the June 2022.affter that date and starting July 2022,numbers drope, but (during bearish market) the slope was positive for both transactions and users count.weekly tx_count per user per week factor also shows an increasing trend in the last weeks.
the sector which is responsible for the majority of transactions is Layer2, representing over 52% of total transactions occurred on Arbitrum sinse June 15 2022.interacting with dexs also was the Arbitrum users’ second popular transaction type , representing over 36% of total transactions
looking at the cumulative chart, the two mwntioned sectors are pioneers by far, and defi sector, surpassing the cex, standing in the third place in transaction growth
Daily ETH value sent to each sectors shows a little different results than the transactions do, which DEX sector is the first one in this metric and CEX and Layer2 are the following sectors by 46%,24% and 18% of volume respectively.

5- NFT

Undoubtedly, the NFT market of each network, is one of the main signs of how that network is doing. In this section , we will look at NFT sector of the Arbitrum project and some of its top NFT collections.

Items provided in this dashboard are :

Daily / total / Cumulative NFT trading factors on Arbitrum - #( Sales/sellers/buyers/tokens)
Daily total NFT #sales and sale volume - USD
Daily MAX price / AVG price / MIN price
top 10 NFT collections in terms of sale count
top 10 NFT collections in terms of sale volume
Daily Sales volume USD by NFT collections
cumulative sales volume USD by NFT collections

the trend of NFT trading on Arbitrum was relatively down ward in the past two months which was bearish market in most of the days indeed.
total 8.54k unique sellers, have sold 14.46k nft tokens to 8.97k unique buyers for 4730 ETH (5.63M USD).average sale price in ETH was 0.01565 and the highest sale was for 4.7 ETH
maximum daily sale volume recorded on June 25,27 and 30 with over 600K usd.
In terms of sale count, Government Toukans,Smulips and openBlocks were the most popular nft collections
In terms of sale volume,Smulips with 40% of total volume (2.08M USD)and Blueberry Club with 16.5% of sale volume or 849K USD were the most popular nft collections

6-SWAPS

Importance of swap sector in a platform is very high. its one of very critical branches of a project’s financial part.

in this section, I will show you the :

Daily swappers and swaps
10 most popular tokens to swap out
Daily number of swap_outs by 10 most popular tokens
10 most popular tokens to swap in
Daily number of swaps by token_in
platforms by Number of swaps

The trend of dily swaps and swappers count is relatively upward in Arbitrum. from latest June, the upward trend started and is continuing as well. the number of swappers on its peak was 12.49k on June 29 and the number of swaps in its peak was 25.73k on August 5.
total of 957k swaps made by 124k unique swappers in the past two months
USDC was the most important token to ==swap out== with over 50% of swaps and ETH was the second with 22.4%
in terms of ==swap in==, ETH was the most popular with more than half of swaps made, and USDC is the second one by 26.5%
sushiswap router and uniswap v3 router was two most popular platforms to use for swapping

7- Tracking Stablecoins on Arbitrum (USDC,USDT and OTHERS)

Considering that the stablecoins of any network are of great importance, I felt it necessary to conduct a review about the stablecoins in to the Arbitrum network and present the results in this section.

Method

case
  		when contract_address = '0xfd086bc7cd5c481dcc9c85ebe478a1c0b69fcbb9' then 'USDT'
  		when contract_address = '0xff970a61a04b1ca14834a43f5de4533ebddb5cc8' then 'USDC'
  		else 'Others'

where
	contract_address in (
  	'0xfd086bc7cd5c481dcc9c85ebe478a1c0b69fcbb9',
  	'0xff970a61a04b1ca14834a43f5de4533ebddb5cc8',
  	'0xda10009cbd5d07dd0cecc66161fc93d7c9000da1',
  	'0x17fc002b466eec40dae837fc4be5c67993ddbd6f',
  	'0x4d15a3a2286d883af0aa1b3f21367843fac63e07',
  	'0x680447595e8b7b3aa1b43beb9f6098c79ac2ab3f'
    )

Items provided :

Daily number of transfers by Stablecoins
Total transfers by stablecoins
Daily Total Volumes Of Stablecoins on Arbitrum
Market Share Volumes Of Stablecoins On Arbitrum
Cumulative total volume by stablecoins
Daily total uers by stablecoin
total users by stablecoins
Cumulative total users by stablecoin
5 Top Protocols By Total Share Volumes USDC
cumulative usdc and usdt volume by top 5 platforms

\

8- BRIDGE

Items provided in this section

daily Bridged ETH value to Arbitrum using Hop protocol + users count
total Bridged ETH value to Arbitrum using Hop protocol + users count

Looking at the results :

35 K ETH was bridged to the Arbitrum by total of 102k users from Ethereum in the last two month which the related vakue is 46.1M
since June 20 to 27th, the volume bridged and users was at the highest rate of the past two months. starting July and I think because of bear market, this amounts dropped dramatically. AMount bridged at its highest day was 5.7M done by 28k users, but , in July , dailu bridger users was 80 to 200 interacting with about 20k usd.

9- Borrow / Repay

In the last part, we will take a brief look at the borrow and repay section in Arbitrum and check the number of users as well as transactions on a daily and general basis.

Looking at the results, 10.92 Borrow transactions was recorded against 3.7k Repays in the past two months.

Number of daily borrows as well as borrowers, has been more than repays and repayers. on June 27, the max count of repays occurred by 827 total repay transactions done by 827 unique users

Items Analyzed in this dashboard

The dashboard cointains 9 sections and each section was broke down to some metrics in order to better analysing the situations

Arbitrum Transactions
First Transactions
Transaction Failure
Staking/Unstaking
NFT
SWAPS
BRIDGE
Tracking Stablecoins on Arbitrum
Borrow/Repays

1- Transactions

In this part, the transactions on Arbitrum platform have been Analyzed and broken down by sectors and status.

Items provided in this section are :

Arbitrum daily total / cumulative transactions and total unique users

Txs per user per week

share of daily/total transactions - per sector

Daily / total user count per sector

Daily / total ETH value per sector

looking at the results. the number of uniaue users and total daily transactions have been at its highest situations on the last quarter of the June 2022.affter that date and starting July 2022,numbers drope, but (during bearish market) the slope was positive for both transactions and users count.weekly tx_count per user per week factor also shows an increasing trend in the last weeks.

the sector which is responsible for the majority of transactions is Layer2, representing over 52% of total transactions occurred on Arbitrum sinse June 15 2022.interacting with dexs also was the Arbitrum users’ second popular transaction type , representing over 36% of total transactions

In terms of Daily number of transfers, USDC has has the highest daily transfer count against all other stablecoins and USDT stands in the second rank. the transfer count for USDC in a daily basis has been 15 to 30k txs per day, but on the June 28th, it raised to 48k txs. for usdc , this metric is about 3 - 5 k per day and its about 2k for total others
73% of total transfers was related to USDC in the past two months and 19.4% USDT
In terms of total transfer volume, again, USDC is ranked first with 60% of total volume transferred or 6.18B USD.USDT is ranked second as well with 2.441B USD or 24% of all volume in the past two months
Looking at the daily volume chart, June 26 was the most important day with the highest volume recorded to all 3 types , 536M for USDC, 360M for USDT and 300M for others
In terms of total users, again, USDC is ranked first with 69.5% of total users or 335.7k .USDT is ranked second as well with 102k or 21% of all volume in the past two months
Radiant Capital was the most popular platform which stablecoin users interacted in the pas two months

what is Radiant Capital ?

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