How Do Arbitrum And Algorand Compare?
Arbitrum and Algorand battle for Crypto Project of the Year
By: André Beganski
November 29, 2023
Over the next several weeks, Coinage is coming to a consensus on which Web3 endeavor shall be crowned Crypto Project of the Year — and it’s truly up to you. Vote or build your own bracket between 16 crypto hopefuls for a shot at 0.25 ETH.
In 2023, Ethereum stood tall as an abundant source of on-chain activity in the crypto space. Some projects leaned deeper into this concept, focussing on scaling Ethereum, while others continued to forge a path toward innovation on their own.
When it comes to one of the leading Ethereum scaling solutions, Arbitrum, Offchain Labs co-founder Steven Goldfeder believes the network is achieving its mission across a plethora of metrics. Algorand Foundation CTO John Woods, however, views Ethereum as outdated.
“It’s like the Intel [x86] chip of crypto space,” Woods told Coinage on Tuesday, comparing the chip maker’s influential CPU architecture to Ethereum’s widely-tapped virtual machine. “But there are things that we've learned over the last decade.”
As a blockchain, Algorand supports smart contracts and decentralized applications. Founded in 2017 by MIT professor Silvio Micali, the project is oriented around speed and near-instant transaction finality. This year, Woods said that the most important thing the Alogrand Foundation did was focus on the experience developers have.
Woods highlighted the release of AlgoKit, describing it as a “soup-to-nuts, single tool” for developers building on Algorand. Providing developers with a way to build, test, and deploy applications on Algorand, he added, has resulted in a “tectonic shift.”
“We're hopeful [it] will result in an explosion of new ideas on the chain in 2024,” Woods said, noting the previous developer experience “wasn't as easy as we would have liked.”
Within the next couple of weeks, people will also be able to start crafting Algorand smart contracts in Python. Pointing to Arbitrum’s $2.1 billion in total value locked across its protocols, Woods wagered, “I think we're going to be stealing a little bit of that TVL away.”
According to CoinGecko, Arbitrum’s TVL towers over other Ethereum scaling solutions. Behind Arbitrum, Polygon’s proof-of-stake chain and Optimism come in at $819 million and $769 million, respectively, as of this writing. Goldfeder of Offchain Labs said TVL is just one statistic where Arbitrum has emerged as a leader.
“Among dozens of layer-twos on Ethereum, [Arbitrum] has dominant market share, dominant TVL, and dominant transaction volume,” he said, adding the network’s stats “compete very well” against layer-one networks as well.
As the Arbitrum DAO and Arbitrum Foundation got off the ground this year, it was the first time the “technology really flew on its own for the time,” Goldfeder said. Describing the network’s community as “stronger than ever,” he highlighted the release of Arbitrum Stylus, which lets developers write smart contracts in multiple programming languages.
“The cool thing is these languages can interact with each other synchronously and seamlessly,” he said, describing Rust and C++ developers as groups the tool could potentially appeal to.
For his part, Woods agreed that over a long enough time period, developers are likely to embrace whichever ecosystem offers the best technology in Web3.
“What I think is more important is this is not a battle of the TVL. This is not like, ‘Who's been around longer’ and ‘Who has more, you know, mindshare,’” he said. “This is [the] battle of the tech, battle of the blockchain.”
While only one project will advance in Coinage’s bracket for Crypto Project of the Year, Woods spoke out against confrontation in the crypto space between competing chains.
“I think it's very important that we harness the best of each of the projects and try to work with each other,” he said. “I think we should be building on each other's shoulders.”
Which project deserves to move forward in Coinage’s Crypto Project of the Year? Coinage Membership Pass holders can watch the full video above and vote on which projects advance in our celebration of crypto’s top projects. Don’t have a Membership Pass? Mint one now!