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Arbitrum is a strong competitor to MATIC, outperforming MATIC on most metrics as an L2. The one caveat for Arbitrum is its poor tokenomics and value accrual. That said, the fundamentals and huge adoption of $ARB way outweigh the shortcomings resulting from the sub-par tokenomics, which in any event are likely to be addressed in the coming 18–24 months.
Arbitrum is arguably the largest chain after ETH and BSC, even beating SOL on multiple metrics. It has the lowest Market Cap to TVL ratio at 1.03. As a comparative exercise, $ARB currently has a MC of $2.7B versus $3.3B for Optimism. Optimism has a third of the stables and TVL, and 1/10th the daily volume.
Arbitrum outperforms any other Layer 2 on ETH by a long shot. Where it falls short vs Polygon is the inflation and token unlocks, as well as the token value accrual. $ARB also has a solid SDK with their Optimistic rollup tech stack, but it is technically inferior to the zkRollups of Polygon, with longer settlements, less throughput and lack of global liquidity.
As a Layer 2, it is THE most undervalued based on the above metrics, but comes in a close second to Polygon as a result of the inflation and tokenomics shortcomings.
I am building a bag as I write, with the goal of building a long term hodl bag for this bull run. My expectations are for a lower risk 10–15X this bull run, and in the event they improve tokenomics, it could push as high as a 20X from today’s prices.
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