How Does the Delay Affect Time-Sensitive Trading Strategies like Arbitrage?

The long withdrawal delay in Optimistic Rollups makes Layer 1-to-Layer 2 arbitrage significantly more complex and risky. Arbitrageurs cannot quickly move capital back to Layer 1 to close out a position or exploit a short-lived price discrepancy.

This forces them to use fast withdrawal services or maintain a large, idle capital base on both layers, which increases their cost and reduces profitability, making the strategy less viable.