arbitrum

By the end of 2025, Arbitrum had firmly secured its position as the leading Layer-2 network, with total value locked hovering around $20 billion. On-chain data tells a deeper story, however. Beyond raw scale, the network has clearly crossed a threshold: Arbitrum is no longer in a phase of explosive, incentive-driven expansion. It has entered a stage of maturity, where growth is increasingly defined by usage depth, capital quality, and sustainable value creation.

Arbitrum’s Financial Standing and Liquidity Profile in 2025
Within the broader Layer-2 landscape of 2025, Arbitrum continues to dominate capital inflows. Data aggregated by DefiLlama shows the network consistently ranking first in TVL throughout the year, peaking at approximately $19.2 billion in early September and reaching the symbolic $20 billion mark toward year-end.

What stands out is not just the quantity of capital, but its composition. Liquidity quality has improved markedly, driven by a sharp expansion of stablecoin supply across the ecosystem. Stablecoin market capitalization on Arbitrum surged by 229% over the year, a shift largely attributed to the effectiveness of the DeFi Renaissance Incentive Program (DRIP). This growth reinforced Arbitrum’s role as a primary USD liquidity hub within DeFi, rather than merely a temporary destination for yield-seeking capital.
From an economic perspective, the network is also demonstrating its ability to generate real, recurring cash flows. In October 2025 alone, Arbitrum recorded $4.4 million in on-chain revenue. While modest compared to centralized platforms, this figure is meaningful in a highly competitive Layer-2 environment and signals that Arbitrum’s business model is beginning to translate activity into tangible economic output.
A Structural Shift: From Scaling Out to Scaling Deep
Early 2025: Linear Growth Dynamics
During the first half of the year, Arbitrum followed a familiar expansion pattern. On-chain indicators showed a strong positive correlation between transaction count and new wallet creation. Network activity was largely fueled by an influx of new users, attracted by incentives and early-stage opportunities.
At this stage, growth depended heavily on onboarding fresh participants. Transaction volume rose primarily because more addresses were entering the ecosystem, rather than because existing users were interacting more frequently.

Late 2025: Decoupling and Network Maturity
By the second half of 2025, especially in Q4, this relationship began to change. Wallet creation slowed and showed signs of saturation, yet total transaction volume continued to climb at a steady pace.
This decoupling is one of the clearest indicators of network health. Growth momentum was no longer tied to continuously attracting new users. Instead, it was driven by existing participants becoming more active.
The shift from “quantity” to “quality” is most evident in the metric of transactions per active address. Early in the year, users averaged roughly five to seven transactions per wallet. By Q4, this metric had reset to a higher baseline, consistently holding above fifteen transactions per wallet.

These figures suggest that Arbitrum has successfully evolved from a short-term liquidity magnet into what could be described as a “habitual execution layer.” Users are no longer leaving after incentive campaigns end. They remain active because the network supports real, recurring needs such as high-frequency DeFi activity and on-chain gaming, hallmarks of a more durable on-chain economy.
Growth Driven by Real Usage, Not Short-Term Incentives
Following its infrastructure build-out phase, Arbitrum’s growth is now increasingly driven by genuine usage demand. The network recently surpassed 2.1 billion lifetime transactions, a milestone that carries more weight when viewed through its acceleration curve.
The first billion transactions took several years to accumulate. The second billion, by contrast, was completed in under twelve months. This compression in time highlights a transition from experimental adoption to large-scale, operational usage.
This activity is supported by a stable and engaged user base. Active wallets have reached approximately 1.45 million, with daily active addresses consistently around 470,000. Rather than reflecting episodic spikes, these figures point to sustained engagement across applications and users.
In parallel with usage growth, Arbitrum has begun to clarify its long-term economic model. The introduction of Timeboost, a mechanism that auctions transaction priority, generated over $5 million in revenue for the DAO within just seven months. More importantly, it demonstrated that network infrastructure itself can be monetized beyond basic gas fees.
This diversification of revenue sources reduces reliance on short-term incentives and lays the groundwork for a more resilient economic framework.
Looking Ahead to 2026: Optimizing Value per User
As Arbitrum moves into 2026, the core challenge is no longer proving scalability or attracting users at any cost. Key metrics around transactions, activity, and revenue suggest the network has completed its foundational phase and entered a stage of stable, large-scale operation.
The strategic focus is likely to shift toward maximizing value per transaction and per user, rather than chasing headline growth numbers. Experiments like Timeboost hint at a broader direction, where revenue is generated not only from base-layer fees but also from value-added infrastructure services aligned with real ecosystem demand.
If Arbitrum continues to expand these models thoughtfully, it could gradually build a more sustainable economic base for the DAO, one less dependent on cyclical incentive programs. In this next phase, competitiveness will be measured not by throughput or application count alone, but by how efficiently on-chain activity is converted into long-term economic value.
This period may ultimately determine whether Arbitrum can maintain its role as a central execution layer within the Ethereum ecosystem, even as competition among scaling networks continues to intensify.
This article is for informational purposes only. The information provided is not investment advice
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