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- Backed by reputable computer scientists and investors, Arbitrum (ARB) has outshined Polygon (MATIC) in Total Value Locked (TVL) and on-chain activity in the recent past.
- The Ethereum network has registered notable growth in Layer Two (L2) scaling solutions amid the mass adoption of web3 protocols and digital assets.
The supremacy battle to dominate the Ethereum (ETH) layer two (L2) sphere has narrowed down to three major players including Arbitrum (ARB), Polygon (MATIC), and Optimism (OP). The need for scaling solutions on the Ethereum network comes from the fact that no single blockchain can seamlessly scale, provide security, and decentralize simultaneously.
Ethereum co-founder Vitalik Buterin described it as the blockchain trilemma, thus creating a new economic model through layer two scaling solutions. With the rising demand for web3 products and digital assets, especially through real-world assets (RWA) tokenization, the layer twos will continue to play a crucial role that cannot be ignored.
Moreover, the Ethereum network takes pride as the largest smart contract-oriented blockchain with a TVL of about $28 billion and a stablecoin market cap of around $69 billion.
Closer Look at Arbitrum vs Polygon
The two largest L2 networks on the Ethereum network by TVL, trading volume, and web3 ecosystem are Arbitrum and Polygon. According to market data provided through Defillama, Arbitrum has a TVL of about $2.37 billion and a market cap of around $2 billion. Polygon network, on the other hand, has a TVL of about $825 million and a market cap of around $1.28 billion.
It is worth noting that Polygon has existed longer than Arbitrum. The two Ethereum-based L2s have recorded notable network development in the past two years to attract more institutional investors and DeFi developers.
Consequently, both Arbitrum and Polygon play host to top web3 platforms like Lido, Maker, Aave, and Uniswap DEX, among many others. Moreover, multichain compatibility has been identified as a crucial factor in the mass adoption of digital assets and web3 protocols
ARB Price Action
The Arbitrum network has a fully diluted valuation of about $17 billion and an average 24-hour trading volume of around $1 billion. ARB price reached its all-time high last week but has since experienced a significant resistance zone between $1.7 and $1.86.
However, the ARB bulls have the upper hand with the weekly Relative Strength Index (RSI) having risen above the 70 level for the first time since the altcoin began trading. Notably, ARB price has gained about 36 percent in the past four weeks to trade at around $1.75 on Monday.
MATIC Market Outlook and Price Analysis
Polygon (MATIC) price has struggled to break through a macro falling trend that began in late 2021. Having consolidated in a bullish pennant flag for the past few months, MATIC has undeniably accumulated significant buyers to ensure a robust breakout.
MATIC has a market valuation of about $7.9 and an average 24-hour trading volume of about $574 million. However, MATIC’s price has dropped about 5 percent in the past 24 hours to trade at
