Original: @defi_mochi Compiled by: Crush, Core Contributor at Biteye
Ethereum's Shanghai upgrade and the explosive growth of LSDs (Liquid Staking Derivatives) have made Ethereum Layer 2s a dominant narrative for 2023.
So, who's winning the L2 race? What does the on-chain wallet and transaction data tell us? I've crunched some numbers on Dune to help us find out.
This analysis covers:
L2 transaction analysis
New wallet analysis
Wallet balance analysis
User distribution
TVL comparison
Summary
01. L2 Transaction Analysis
Looking at the past six months since October, both Optimism and Polygon show clear upward trends in transaction volume.
Arbitrum's transaction volume peaked in November during the FTX collapse, as users flocked to GMX for decentralized perpetual contract trading.
Even for ERC-20 transactions, Optimism's daily count has grown exponentially—from around 400,000 in October to nearly 1.5 million per day.
As a more established L2, Polygon still leads in daily transaction volume, but Optimism is clearly catching up fast.
Notably, Optimism's share of the L2 transaction market was only about 5% in October but has now grown to nearly 20.1%.
Surprisingly, Arbitrum's share of ERC-20 transactions has declined from a high of 25% in October to around 15% today.
While many users are transacting more on Optimism in hopes of a potential airdrop, Polygon still dominates ERC-721 (NFT) transactions, accounting for over 80% of the total. This is largely due to its partnership with Reddit.
In contrast, Arbitrum's NFT ecosystem remains relatively underdeveloped, commanding only about 4% of such transactions.
02. New Wallet Analysis
In terms of total wallet addresses, Polygon holds a commanding lead, largely thanks to its Reddit partnership, which contributed over 4 million of its 14 million wallets.
Surprisingly, Arbitrum and Optimism each have fewer than one-tenth the number of wallets that Polygon does.
When Reddit NFTs peaked in October, nearly 96% of all newly created wallets were on Polygon.
Since then, however, Optimism and Arbitrum have captured more attention, with each now attracting about 27% of new wallet creations.
Polygon's new wallet creation peaked in October—the same month Reddit NFT sales hit their highest point, with transaction volume reaching 4 million.
But how many of these Polygon and Optimism wallets are purely "airdrop farmers"? How many hold Reddit NFTs? And how many might be fake or sybil addresses? This is where analyzing wallet balances becomes crucial!
Note: For a fair comparison, Polygon's statistics only include wallets with non-zero balances.
03. Wallet Balance Analysis
On Arbitrum, 63% of wallets hold less than $10. Interestingly, it also has the highest proportion of wallets holding over $100,000 among all L2s.
Total wallets with non-zero balances: 750,000
$1 – $10,000: 4.3%
$10,000 – $100,000: 1.59%
Over $100,000: 0.5%
Despite having fewer total wallets, Optimism actually boasts more active wallets (with non-zero balances) at 789,000. Only 45% hold less than $10, while over 20% hold between $100 and $1,000.
$10,000 – $100,000: 1%
Over $100,000: 0.28%
Given that most Polygon wallets hold only NFTs, it's no surprise that nearly 75% hold less than $10. Furthermore, out of 14 million wallets, only 5 million hold ERC-20 tokens.
$1 – $10,000: 3%
$10,000 – $100,000: 0.78%
Over $100,000: 0.17%
04. User Distribution
Despite a decline in transaction volume, capital in Arbitrum's top wallets is becoming more concentrated. It holds nearly 25% of all "whale" wallets (balance > $100,000), even though it has 4.3 million fewer ERC-20 wallets than Polygon.
For comparison, Optimism has 2,255 wallets with balances over $100,000, while Arbitrum has 3,968.
This concentration extends to "dolphin" wallets ($10,000–$100,000), where Arbitrum commands a substantial 20% share, compared to Optimism's 12%.
05. TVL Distribution
Turning to DefiLlama's TVL data, Arbitrum shows exponential growth despite lower transaction volume. Its share recently dipped slightly from 2.7% to 2.5%, while Optimism's growth has stalled since November.
Both Optimism and Arbitrum show negative monthly TVL growth, while Polygon grew by 7% this month. Additionally, Optimism's TVL is nearly half that of Arbitrum, while Arbitrum and Polygon have relatively close TVL figures.
06. Summary
Currently, Arbitrum faces declining transaction volume, yet it continues to attract significant TVL inflows, and its whale wallet concentration remains high. While user activity is low, Arbitrum could boost engagement—much like Optimism has—through airdrops and task-based incentives.
Optimism excels at user acquisition, particularly through diverse quests and tasks. With the upcoming Optimism Bedrock upgrade, we hope to see more protocols migrate to the network and witness DeFi innovation on Optimism reach the same level as on Arbitrum.