MARKET ANALYSIS | Leading Ethereum Layer 2 Sees Monthly Active Addresses Fall Over 40% YoY

Arbitrum’s monthly active addresses fell about 44% from a year earlier to 1.87 million over the past 30 days highlighting slowing user engagement on Ethereum’s largest Layer-2 network despite continued efforts to stimulate activity through decentralized finance (DeFi) incentives.

The decline comes as competition among Ethereum scaling networks has intensified with rivals including Base attracting a growing share of users, developers, and stablecoin activity. While Arbitrum remains one of the largest Layer-2 ecosystems by total value secured, user activity has cooled from peaks seen during previous incentive-driven growth cycles.

Ranking first among Ethereum Layer-2 rollups by a wide margin, per L2Beat data as of May 17, 2026,

• Arbitrum holds $15.57 billion in total value secured across its rollup, sitting over 28% ahead of
• #2 Base at $12.11 billion, and well above
• #3 OP Mainnet at $1.57 billion.

The recent growth stats are in stack contrast to the network’s early days when it emerged as the top performer with a remarkable increase of over 100% during some quarters.

Active addresses measure the number of unique wallets interacting with a blockchain over a given period and are widely viewed as a proxy for network adoption. A sustained decline can signal weaker demand for decentralized applications, fewer on-chain transactions and softer ecosystem growth, although the metric does not necessarily reflect transaction value or institutional usage.

Arbitrum continues to host billions of dollars in on-chain assets and remains a leading destination for DeFi protocols, but the latest address data suggests liquidity incentives alone may no longer be sufficient to sustain user growth as Layer-2 networks compete on speed, cost, application ecosystems, and consumer-facing products.

Arbitrum has also been marred with controversy over the recent freeze of over 30, 000 ETH tied to the Kelp DAO exploit, an unusual step for a blockchain system built on principles of immutability and permissionless access where transactions are typically irreversible.

Critics warned the move sets a precedent that could erode trust in decentralized systems if governance bodies can freeze or reassign assets.

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