Arbitrum and Optimism Toppled Ethereum in Transactions Across 2022 

Despite the successful Ethereum Merge in September, transactions on layer-2 blockchain networks continue to grow as Ethereum shrinks.

Battle of the Giants

According to data from Etherscan, Optimism, and Arbitrum – two of the largest Ethereum layer-two networks – have seen significant spikes in transaction volumes over the past three months. 

Both networks have processed over 1.1 million between them since September, while the volume of transactions on the main Ethereum network appears to have declined by about 33% since late October.

Additional data from Dune Analytics corroborates this, confirming that Optimism and Arbitrum have successfully flipped Ethereum. Per the data, the Ethereum mainnet processed over 1.06 million transactions between October 2022 and January 10, 2023, while the combination of Arbitrum and Optimism processed over 1.12 million transactions. 

So far, it has been quite an impressive period for layer-two networks since the Ethereum Merge happened. L2beat, a layer-two ecosystem analytics website, reported that activity on most of these networks, especially in transactions per second, has surpassed ETH.

Likewise, L2beat reported that Arbitrum and Optimism represented 80% of the layer-two ecosystem. With about $2.34 billion in collateral, Arbitrum One has the highest total volume locked (TVL). Second in TVL is Optimism, with $1.28 billion. 

The Coming Flippening

Of course, it is worth noting that these only serve to booth the transaction volumes on the ETH network. Earlier this month, data from Ycharts and the Nasdaq shared on Reddit revealed that transactions on the entire Ethereum blockchain surged by 338% in the past year. This was enough to eclipse even the Bitcoin network, although the leading cryptocurrency remained tops when it came to online search interest. 

In total, there were 408.5 million Ether transactions in 2022, compared to 93.1 million Bitcoin transactions. Average daily transactions on Ethereum also cocked in at 1.1 million, while those for Bitcoin were pegged at 250,000. 

Nevertheless, transaction volumes on Bitcoin were steadier than Ethereum over the year, with the latter experiencing more volatility due to spikes in demand at certain points, such as non-fungible token (NFT) airdrops and launches, new platform launches, and more. 

It is worth noting that the charts here also don’t include layer-two transactions, which would put Ethereum at an even higher advantage over Bitcoin when it comes to transactions. 

The hefty transactions have continued into the year, with data from Bitinfo charts reporting that the Ethereum blockchain’s transaction volumes for the first week already passed 2 million, compared to about 500,000 for Bitcoin. 

All of these fuel the fire of speculation that ETH could one day “flip” Bitcoin – a phenomenon where Ethereum (the token) eventually surpasses Bitcoin in terms of market cap. Ethereum’s blockchain essentially flipped the Bitcoin blockchain already, but many have pointed out that ETH could surpass BTC, especially with the Ethereum Merge coming. 

Nevertheless, the analyst who posted the metrics explained that he was “skeptical about people saying that a flipping could happen someday.” He added that those who have been advocating for the flipping have some reason to do so now.