User Retention on Arbitrum and Optimism

Key Insights

• While Arbitrum arguably relied on organic growth, Optimism focused on incentivizing users to accumulate their respective 3 million unique users over the past year.
• At the network level, both Arbitrum and Optimism retained a comparable 35-45% of new users in the short-term, but Optimism held a higher portion of its long-term user base.
• Native applications primarily drove Arbitrum's application-level retention rates, while applications participating in an incentives program fueled Optimism's retention rates.

Amidst a bear market and multiple black swan events, Arbitrum and Optimism are having a record breaking year in terms of ecosystem growth. Both have accumulated nearly 3 million unique users apiece, and transaction activity keeps breaking all-time highs.

Each project takes a different approach to scaling a user base. While Optimism focuses on incentivizing user engagement, Arbitrum has arguably achieved more organic growth. The success of either strategy will be determined by what type of users are retained and whether or not these long-term consumers can add value to the prospective ecosystems.

Ecosystem Cohort Analysis