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Arbitrum vs Polygon: Is there a shift in L2 dynamics?

2 Mins read


  • Arbitrum has risen above Polygon to become the most dominant L2.
  • MATIC has dropped below $1 while ARB has maintained it.

Polygon [MATIC] was once considered one of the most, if not the most, popular Layer 2 (L2) networks. However, in recent times, recently launched L2 network Arbitrum [ARB] has gained significant prominence.

How does Arbitrum compare to Polygon?

Comparing the volume and TVL of Polygon and Arbitrum

An analysis of Polygon’s volume trajectory on DefiLlama indicated an uptrend at press time. Towards the end of December, it reached its second-highest volume of the year, approximately $435 million.

2023’s peak volume occurred in March, reaching around $669 million. Notably, Polygon’s volume surpassed $1 billion only once in 2021, exceeding $2 billion. As of this writing, its volume was around $106 million.

Polygon TVL and VolumePolygon TVL and Volume

Source: DefiLlama

Examining the Total Value Locked (TVL), there has been an overall decline for Polygon in recent weeks, with the TVL at around $845 million at present. Conversely, Arbitrum’s TVL was over $2 billion, showing an upward trend in the past few weeks.

In the last 24 hours, Arbitrum’s volume was over $405 million. Notably, in the new year, Arbitrum’s volume has surpassed $1.8 billion twice.

Arbitrum TVL and VolumeArbitrum TVL and Volume

Source: Defillama

The L2 conversation 

According to data analyzed by AMBCrypto via L2 Beats, Arbitrum stood as the most dominant Layer 2 (L2) network at press time.

During this time, Arbitrum commanded nearly 50% of the market share, boasting a total value locked (TVL) of over $9.8 billion.

In stark contrast, Polygon ranked 12th with a comparatively modest $111 million, holding less than 1% of the market share.

This data underscored a significant shift in the L2 landscape, signaling that other networks have moved past Polygon.

Not only were these alternative L2 networks generating higher volumes, but they were also attracting a larger user base, as indicated by their growing market shares.

MATIC follows market trends as ARB detaches

AMBCrypto’s examination of Polygon’s daily timeframe chart showed the impact of the recent market movement on its price.

On the 3rd of January, Polygon experienced a significant price crash of around 11.8%, and since then, it has struggled to recover. Before the crash, its trading price was around $1, but as of this writing, it has declined to around $0.8.

MATIC/USD price trendMATIC/USD price trend

Source: Trading View

Realistic or not, here’s ARB’s market cap in MATIC’s terms

In contrast, Arbitrum demonstrated a different trend during the market crash. Despite the broader market downturn, Arbitrum gained over 8%. However, it faced a decline recently, losing over 2% and more than 10% on the 5th of January.

As of this writing, it was showing a gain of almost 5%, with a trading price of around $1.8.

ARB/USD price trendARB/USD price trend

Source: Trading View

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Harry is a crypto enthusiast and experienced trader with a track record of success. With a deep understanding of blockchain technology, he has analyzed market trends and identified profitable opportunities, resulting in impressive returns. Harry 's expertise lies in developing effective trading strategies that leverage the potential of cryptocurrencies. Through his articles, guides, and educational resources, he shares his insights and knowledge, helping individuals make informed trading decisions. With a keen eye for market patterns, Harry has navigated the volatile crypto landscape with confidence. Stay tuned for valuable perspectives and expert advice from Harry as he contributes to the Ailtra platform.
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