These platforms have found their own special places, each with its own strengths and challenges.
Let’s dive into what sets them apart and explore why Optimism might face some difficulties in surpassing the zkSync Era.
zkSync Era: The Money Maker
When it comes to making money in the Layer 2 space, zkSync Era is leading the pack.
According to data from Dune Analytics, zkSync Era has captured a significant 42% of the total revenue generated by various rollups.
This impressive achievement highlights its ability to generate substantial profits for its users.
On the other hand, Optimism is in a somewhat less impressive position, accounting for a smaller 15% of profits.
.@zksync is the most profitable L2 among all others.
Yet, It is also the most expensive L2 to use.
Within a year, @zksync has earned a profit of $15.30M from transaction fee alone (Excl. operator costs) 👑
— Poopman (ve 💩, 🌿) (@poopmandefi) August 28, 2023
The Optimism Edge: Cheaper Transactions
Amidst this competition, Optimism stands out with its lower transaction costs compared to the zkSync Era.
This cost difference has caught people’s attention and raised optimism about what the platform can achieve.
zkSync Era’s design requires validation proofs for accuracy, which adds extra steps and higher costs to transactions.
In contrast, Optimism’s streamlined approach results in lower expenses, giving it an advantage in this area.
The impact of lower transaction costs is significant.
It makes it easier for new users to join the Optimism community, potentially attracting more people to the platform.
This could lead to Optimism surpassing the zkSync Era in terms of network activity in the months to come.
zkSync Era’s Activity Dominance
Although Optimism’s cost advantage is eye-catching, it’s not the sole factor shaping the future of these platforms.
Insights from Artemis’ data shed light on an important aspect: zkSync Era’s strong network activity.
Both the number of active users and daily transactions on zkSync Era far exceed those on Optimism.
Notably, zkSync Era recently celebrated a major milestone by reaching over 100 million transactions—an achievement that speaks volumes about its growing influence.
This story gets more interesting when looking at decentralized exchange (DEX) trading volumes.
zkSync Era’s DEX volume is on the rise, indicating higher user engagement and trading.
On the flip side, Optimism’s DEX volume shows a different trend, with a noticeable decrease.
This suggests differences in adoption and user involvement between the two platforms.
Optimism’s Position and Investor Worries
While zkSync Era takes the lead in network activity and transactions, Optimism holds its ground when it comes to Total Value Locked (TVL).
Its dominance in this metric suggests that despite challenges, it still has a committed user base.
However, the situation changes when we look at investor sentiment and market performance for Optimism.
Data from CoinMarketCap shows a decline of almost 10% in Optimism’s price over the past week, currently trading at $1.42.
Despite this drop, its market capitalization remains above a billion dollars.
The negative sentiment around Optimism’s price decline has affected how the crypto market perceives the token.
A significant drop in network growth, reflected by a sharp decrease in new addresses created for token transfers, adds to these concerns.
The decrease in the MVRV ratio, another metric impacted by the price drop, adds to the unease.
The Path Forward: Addressing Challenges and Playing to Strengths
As the competition between zkSync Era and Optimism continues, it’s important to understand the complexity of their rivalry.
While Optimism boasts cheaper transactions and maintains strength in TVL, the zkSync Era shines in terms of network activity and transactions, driven by its profitable performance.
For Optimism, the road ahead involves tackling the issues raised by its market performance and investor sentiment.
Overcoming these challenges requires strategic efforts to build confidence and gather support.
At the same time, Optimism should leverage its transaction cost advantage to attract more users, potentially tipping the balance in its favor over time.
In conclusion, the race between zkSync Era and Optimism highlights the intricate nature of success in the Layer 2 landscape.
While transaction costs and profits are important, they are just part of a bigger picture that includes user engagement, network activity, and investor sentiment.
As both platforms navigate their unique paths, the outcome of this competition will undoubtedly shape the future of Ethereum’s Layer 2 solutions.