Optimism Outdoes Arbitrum: OP’s User Retention Rises, Market Stays Bearish

• Optimism outperformed Arbitrum in terms of user retention, resulting in an increase in OP’s revenue.
• Messari published a report comparing OP & Arbitrum which showed that Optimism had higher long-term user retention rates.
• Despite this, OP’s token has seen a decline in price and market capitalization over the last week.

Comparison Between Optimism (OP) and Arbitrum

Messari published a report comparing Optimism [OP] and Arbitrum. The report mentioned that while Arbitrum may have relied on organic growth, Optimism concentrated on providing incentives for users to reach its 3-million unique user milestone throughout the previous year. To better comprehend retention rates on @arbitrum and @optimismFND based on cohort analysis and application level retention, check out the full Pro report from @0xallyzach.

Retention Rates of Both Blockchains

As per the report, in the short term, 35–45% of new users were retained by both Arbitrum and Optimism, although Optimism retained a larger percentage of its long-term user base. Though both the short- and long-term retention rates are valuable metrics, the latter is more important in order to understand the value of a blockchain. Moreover, Optimism’s long-term retention was considerably higher than that of Arbtrum, suggesting more users‘ trust in the L2 blockchain.

Network Fees & Revenue Increase

Interestingly, while OP’s retention rate registered a hike, Token Terminal’s data revealed that the same remained true for the blockchain’s fees. OP’s network fees and revenue both went up over the last 30 days, indicating increased usage. Source: Token Terminal Further growth in the Optimism network can be expected as the blockchain approaches the date of the much-awaited Bedrock upgrade. The new upgrade is expected to go live in March, and it will considerably reduce usage fees on the mainnet.

Price Drop & Market Capitalization

OP was feeling heat as its native token had reasons for concern as its price declined by over 17% in the last seven days. According to CoinMarketCap, OP was down by 5.5% in