Bernstein: Arbitrum Has Strongest User Momentum Among Leading Blockchains
Arbitrum has the strongest user and transaction momentum among leading blockchains, Bernstein said in a research report Wednesday.
The chain, a so-called rollup for Ethereum, is expected to maintain its strength, having increased its lead in both speed and costs with its recent Nitro upgrade. It has also launched a dedicated Web3 and gaming chain called Nova, the report said.
Rollups such as Arbitrum and rival layer 2 blockchain Optimism scale the Ethereum network by processing transactions and executing smart contracts – the computer programs that run on some blockchains – on their own chains.
Bernstein said it expects a host of trading, gaming and non-fungible-token (NFT) projects to launch on the blockchain. NFTs are digital assets on a blockchain, representing ownership of virtual or physical items and can be sold or traded.
The broker also notes speculation of a potential Arbitrum token launch in the near term, which could be used to reward early users.
Ethereum’s large user and developer base “will continue to act as a feeder to rollups,” analysts Gautam Chhugani and Manas Agrawal wrote, adding that they “expect a new growth cycle to emerge in crypto as rollups drive mainstream application building on Ethereum.”
The layer 2 blockchains are “providing the first proof of concept that rollups work while relying on the security and settlement network of Ethereum,” the note said. “This retains the relevance of Ethereum and makes it competitive versus peers,” the note added.
Abitrum recently paid around 400 ether ($53,000) to a hacker who flagged a vulnerability in the upgrade. Developers behind the scaling tool had missed a change that would have allowed attackers to steal all funds sent to the network.