| Article Information |
| Journal: |
Business and Economics Research Journal |
| Title of Article: |
Research on the Scalability Effect of Arbitrum and Optimism Applications in the Ethereum Network |
| Author(s): |
Mehmet Çınar, Muhammed Apak |
| Volume: |
15 |
| Number: |
4 |
| Year: |
2024 |
| Page: |
389-404 |
| ISSN: |
2619-9491 |
| DOI Number: |
10.20409/berj.2024.451 |
|
| Abstract |
| As Bitcoin’s popularity has grown, scaling issues have inevitably emerged. Limitations on block size and increasing transaction fees have sparked debates and triggered the search for alternative solutions. Ethereum was designed to surpass Bitcoin’s limited functionality and provide more complex features such as smart contracts. However, the widespread adoption of Ethereum has led to challenges in sustaining increased transaction volumes without compromising on speed and/or cost. In response to these difficulties, layer-2 scaling solutions like Optimistic Rollup have been developed. This study examines the scalability challenges of the Ethereum network and assesses the impact of layer-2 scaling solutions, specifically Arbitrum and Optimism, on scalability. According to the study’s findings, the activation of Arbitrum and Optimism results in an increase in both daily average transaction numbers and average transaction fees on Ethereum. These findings indicate that layer-2 solutions like Arbitrum and Optimism have not been successful in enhancing Ethereum’s scalability and reducing transaction costs as originally envisioned. |
| Keywords: |
Blockchain, Scalability, Optimistic Rollup, Arbitrum, Optimism, Layer-2 |
|
| JEL Classification: |
D13, E44, G15 |
|
