Altcoins
Arbitrum: Overall gas usage rises, but at what cost?
Arbitrum witnesses a substantial surge in gas consumption, with MEV bots playing a significant role in this rise.
- Gas usage on Arbitrum soared over the last few months.
- However, the gas usage was driven by MEV bots.
Arbitrum [ARB] has dominated this year in the layer 2 sector, outcompeting other protocols in various areas. This has led to Arbitrum collecting $14.8m in gas fees from its top 10 projects.
Stepping on the gas
Arbitrum collecting $10 million in gas fees is a positive sign. This means that more people are using the network, which can help it grow further. When users pay gas fees, it shows they find value in the services provided to them.
$ARB: $14.8m in gas fees from the top 10 projects$POL: $12.2mm in gas frees from the top 10 projects$OP Mainnet: $11.9m in gas fees from the top 10 projects$BASE: $3.6m in gas fees from the top 10 projects (annualized to $14.4m)$AVA: $5.3m in gas frees from the top 10 project pic.twitter.com/Xf2nnexJBU
— EnneZeta.eth (@EnneZeta) November 12, 2023
These fees can be used to improve the network and attract more users. It’s like a reward for the network for being useful. It also helps secure the network by giving a financial incentive for people to validate transactions.
BOT and sold
However, a lot of the activity and gas usage has been driven by MEV bots. MEV, or Miner/Maximal Extractable Value, bots are automated systems that search for and exploit profit-making opportunities in blockchain transactions.
They aim to reorder transactions in a way that benefits them financially, often at the expense of regular users.
These bots can have negative effects on the Arbitrum protocol. They can lead to higher gas fees, making it more expensive for regular users to interact with the network. MEV bots may also disrupt the order of transactions, causing delays and uncertainties.
Additionally, MEV bots can create an uneven playing field, where those with advanced technology and resources have an advantage over regular users. This can deter participation and trust in the protocol.
However, Arbitrum’s product line may still have a good impact on the sentiment surrounding Arbitrum.
Realistic or not, here’s ARB’s market cap in BTC’s terms
Product line
Arbitrum has three main products to improve its network. The first is Arbitrum One, which is like the main secure layer. It’s good for things like DeFi that need high security. The second one is Arbitrum Nova. It’s for games, NFTs, and social apps, which need to be fast.
The third one is Arbitrum Orbit. It helps people make their own blockchains and manage them. These transactions settle in either Arbitrum One or Arbitrum Nova.
Source: Santiment
