Arbitrum application ecology at a glance: which DeFi big players are currently standing by Arbitrum?

Arbitrum officials say that more than 250 teams have applied for access and it is open to all developers. More and more DeFi projects will join the Arbitrum ecosystem in the coming period.

Arbitrum application ecology at a glance: which DeFi big players are currently standing by Arbitrum?

The high GAS cost and network congestion have made DeFi and DEX-like applications demand for Ether scaling more and more, while Ether Layer2 scaling solutions are starting to really enter the white-hot competition. From the early Optimistic and zkSync to the now hot Arbitrum and Polygon, decentralized exchanges and DeFi project owners have to choose to “gamble” on these solutions. Arbitrum is likely to be one of the first Layer2 solutions to achieve mass adoption.

On May 29, the Uniswap community concluded a vote and approved the proposal to deploy Uniswap v3 on Arbitrum with nearly 100% support. Based on a previous commitment by Uniswap founder Hayden Adams, the Uniswap development team will deploy Uniswap v3 at Arbitrum. Robert Leshner, founder of Compound, said, “Who knows knows which network is more attractive, and if Uniswap only decided to deploy in Optimism, and it turns out that Arbitrum is the most popular Rollup solution, which would benefit the competition. …… But by deploying v3 in Arbitrum, Uniswap can solve the high Gas fee problem in the short term without any contract changes. .

After that SushiSwap also announced its deployment on Arbitrum. In fact, as early as February 7th of this year, a community member named “cryto_navi” posted a proposal to deploy SushiSwap on Arbitrum Rollup in the SushiSwap forum, and at that time A poll was launched, with 89% support.

The fact that big players in the DeFi protocol, such as Uniswap, are choosing to “take sides” in the different Layer2 options comes from the urgency of the current scaling needs, and as Robert Leshner said, no one is sure which scaling option is better right now, but if the project owner chooses only one or chooses the wrong one, it will give the project the opportunity to choose the wrong one. If the project owner chooses only one or chooses the wrong one, it gives the competition a chance to take advantage of it. Rather than a choice, these Layer2 scaling solutions are a battle between them.

Why is Arbitrum the first Layer2 solution that can be used at scale today?
Layer2 scaling technologies are mainly divided into Stateful Channel, Sidechain, Plasma, Optimistic Rollup, ZK Rollup, Vadium and so on. Vitalik’s “Incomplete Summary Guide to Rollups” talks about how Rollups, unlike previous Layer2 solutions, can support common EVM code, allowing for easy migration of existing applications, and is still an early but rapidly evolving technology.

Arbitrum is also one of the Rollups, which was created by the Offchain Labs team based on Optimistic Rollup technology. Currently released in beta version V4, a candidate for the future mainnet, Arbitrum is built on Ether and uses the ability to communicate between L1 and L2 to theoretically transfer any form of Ether asset between layers one and two without trust. It is worth noting that although Arbitrum’s transactions still take place on Ether, Arbitrum spends very little GAS fees compared to the main Ethernet network because Arbitrum only submits the raw transaction data to Ether, with execution and contract storage occurring off-chain.

According to Ed Felten, founding partner of Arbitrum Rollup, the Arbitrum protocol follows three core principles: firstly, it is compatible with Ether; secondly, it allows as many transactions as possible to be executed off-chain (saving GAS fees); and finally, it is trustless, which means that it is like being on the Ethernet mainnet, anyone can make this chain make the right transaction behavior.

The core of Arbitrum’s GAS fee reduction lies in sending and storing different data on different blockchains, which is the main way of reducing GAS fees in the current Rollup solution. For example, the transaction data submitted by users is stored on the Ethernet chain, thus ensuring the openness and transparency of the transaction content, but the calculation and storage involved in the transaction will be placed in Arbitrum, i.e. under the Ethernet chain. But such a solution will have the security problem, that is, how to ensure that the data sent to the Ethernet chain is secure?

The ArbitrumRollup chain is secured by a multi-round interactive Optimistic Rollup protocol. Any user can submit an assertion about the execution of the Rollup chain. After the assertion is submitted to Layer1’s Etherchain it enters a challenge period where any other user can challenge the correctness of the assertion. If someone initiates a challenge, the dispute will be mediated by Etherpad and the honest user is able to receive a reward. To incentivize honesty, the challenger will place a deposit, which will be forfeited if the dispute fails.

Another major advantage of Arbitrum over the Optimism solution is that it is fully EVM compatible, supporting any EVM language (vyper, YUL+, etc.). What does it mean to be fully EVM compatible? dForce founder Yang Mindao said in his circle of friends, “The fact that Optimism is not 100% EVM compatible is a major strategic miscalculation, not to mention the delayed market launch. these people don’t get it. 99.9% compatible and 100% incompatible are actually the same thing.”

In addition, Steven Goldfeder, founder of ArbitrumRollup, has revealed that a ZK Rollup researcher will be joining the Arbitrum team, which means that Arbitrum will perhaps integrate ZK Rollup technology in the future. By introducing zero-knowledge proof technology, it can perform all computations in bulk under the chain, while only submitting a zero-knowledge proof to Ether for verification (Ether will verify these proofs), and storing enough data to accurately determine the state of the account under the chain, it has the security of the Ether tier.

He believes that the advantage of ZK Rollup is the fast confirmation of transfers and withdrawals without waiting, which neither Arbitrum nor other solutions can do at the moment. In the long run, if Etherium is to achieve wide application and EVM compatibility, ZK Rollup is a better choice, but the time span will be stretched to several years or even longer. And what Arbitrum does is to meet the current demand for Ethernet expansion, which is why it will be the current choice for all kinds of DeFi protocols.

Mainstream DeFi protocols choose to stand in line with Arbitrum
In addition to the Uniswap v3 and SushiSwap mentioned at the beginning of the article, the mainstream exchange OKEx also announced its cooperation with Offchain Labs, the research and development team of Arbitrum, which will support its users to directly top up and withdraw funds on Arbitrum’s main network without interacting with Ether Layer1. OKEx also announced that it has partnered with Offchain Labs, the research and development team of Arbitrum, to support its users to top up and withdraw funds directly on Arbitrum’s main network without interacting with Ether Layer1 and without Ether Gas fees. OKEx has been open and positive about innovative Layer 2 network technologies like Arbitrum, helping them to be tested by more users, and this partnership will ease the clogging of the Ether ecosystem and facilitate Ether’s Rollup-focused development program, according to OKEx.

There are already a number of application projects that support and integrate Arbitrum, including wallets, developer tools and various DeFi application facilities, and the overall eco-application categories and numbers are still quite substantial.

DeFi applications mainly cover projects such as decentralized exchanges, automated market maker services, decentralized regulatory platforms, NFT games and cross-chain transfers. Among them, MCDEX, a decentralized perpetual contracts and futures exchange, is the first project to adopt Arbitrum’s scaling solution, which has previously been running on Arbitrum’s test network and deployed MCDEX v3 on Arbitrum’s main network on May 28.

MCDEX chose Arbitrum for two reasons, in addition to multiple rounds of interactive fraud to prove cost reduction and full EVM compatibility. One is that Arbitrum offers more detailed documentation, code and a license-free test network compared to Optimism; the second is that the sequencer model introduced by Arbitrum allows users to quickly confirm the status of transactions on Layer2.

Supported wallet applications on Arbitrum include MetaMask, MathWallet, Formatic, portis, WalletConnect, and Burner Wallet.

In terms of developer tools, Arbitrum encompasses The Graph, a blockchain data indexing project, Ankr, a Web3 blockchain cloud infrastructure platform, Hardhat, an ethereum development environment tool, Blocknative, a blockchain data platform, ethers.js, web3.js, Brownie and a blockchain development platform Alchemy.

On the browser side, Arbitrum recently entered into a partnership with Etherscan, who will develop a browser for Arbitrum, which is expected to be completed by the end of July.

In addition, Arbitrum’s partner prophecy machine is Chainlink, which, given its market share and position in the prophecy machine space, will likely influence the choice of other prophecy machines to come on board thereafter.

Arbitrum technology is currently launching Arbitrum One. Arbitrum contracts are deployed on the Ethernet mainnet and have started a beta program, which is currently in the mainnet testing phase. arbitrum officials say that over 250 teams have applied for access and it is open to all developers. More and more DeFi projects will join the Arbitrum ecosystem in the coming period.

It’s important to note that even though there are now a number of projects supporting Arbitrum, it doesn’t mean that Arbitrum is the final winner; Layer2 is getting more and more entries, and everyone is in the technical exploration phase, so it’s not a winner-takes-all situation yet. The race is just starting to get underway.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/arbitrum-application-ecology-at-a-glance-which-defi-big-players-are-currently-standing-by-arbitrum/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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