Arbitrum One’s Total Value Locked (TVL) witnessed a remarkable increase of 15.9%, reaching a milestone of $10.22 billion in the past seven days, making it the first Layer 2 (L2) network to surpass the $10 billion TVL mark.
The achievement follows an incident on December 15, where Arbitrum One faced a two-hour partial outage due to a surge of Bitcoin Ordinals-inspired inscriptions that led to the triggering of a sequencer stop.
According to data by L2Beat, the total TVL for Ethereum Layer 2 networks has reached $20.82 billion, with Arbitrum One contributing significantly by accounting for 48.03% of the total.
Arbitrum currently holds a diversified asset portfolio with 30.9% in Ethereum (ETH), 23.68% in its native governance token ARB, 29.66% allocated to stablecoins, and the remaining 15.76% spread across various other assets. Notably, the ARB token has registered a 14.3% increase in value over the past 24 hours, according to Coingecko data.
The success of Arbitrum One can be attributed to its ability to replicate the Ethereum experience while offering substantially lower transaction costs. This cost-effectiveness has attracted a considerable number of decentralized applications (dApps), with approximately 470 currently deployed on the network.
The implementation of the ARB token, serving as a governance token, has significantly contributed to the platform’s growth. Governance tokens empower holders to actively participate in decision-making processes concerning the platform’s development and policies, thereby incentivizing greater user engagement within the ecosystem.
Furthermore, the Arbitrum One network boasts a well-established Security Council, a deployed and operational proof system, and accepts fraud proofs from a minimum of five external actors. Moreover, the platform offers a 7-day exit window without relying on a permissioned operator in the event of an unpopular upgrade by actors with more centralization than a security council.
Arbitrum One faced downtime on December 15, which was categorized as a “major outage” on the dashboard. An investigation was initiated to identify the root cause and implement a fix.
Before the interruption, Arbitrum’s layer-2 network had processed over 22.29 million transactions, as reported by l2beat, and boasted a total value locked of $2.3 billion, according to DefiLlama data.
The incident on December 15 was not the first time Arbitrum faced disruptions. In June 2023, the DeFi Layer 2 network experienced a standstill for over an hour due to a bug in its sequencer. The bug caused the sequencer to revert batches on-chain, leading to the depletion of Ether (ETH) from the sequencer. Developers intervened by manually replenishing the sequencer, addressing the bug, and restoring normalcy to the Layer 2 network.