A Comprehensive Guide to the Ethereum Layer 2 Project Arbitrum

1. Project Overview

Arbitrum is an Ethereum Layer 2 scaling solution based on Optimistic Rollup developed by the Offchain Labs team. It achieves high throughput and low fees by processing transactions off-chain and uploading compressed data to the Ethereum mainnet.

1.1 Technical Features

• Multi-round fraud proof interaction, reducing the gas consumption of a single challenge
• Almost 100% compatible with EVM, low migration costs
• Adopt WebAssembly architecture to replace the old AVM architecture
• Use Geth instead of a custom EVM simulator
• ArbOS has been rewritten in Go, optimizing the batch processing and compression system

2. Current Status of Arbitrum

As of March 2023, Arbitrum is the largest layer 2 network by TVL, reaching $3.85 billion, accounting for 3.63% of all networks. Its native token $ARB was announced on March 16 with an initial total supply of 10 billion tokens.

3. Technical Upgrade

In 2022, Arbitrum launched multiple technical upgrades:

• Arbitrum Nova: A new chain based on AnyTrust technology, designed for gaming and social applications
• Nitro: Significantly enhance network speed and reduce transaction costs
• Stylus: A new generation programming environment supporting languages like Rust, C and more.

4. Ecological Development

Well-known projects such as Uniswap and AAVE have already been deployed on Arbitrum. The Odyssey event in June 2022 attracted a large number of users to participate. Currently, the number of monthly active addresses exceeds 600,000, an increase of 51.2% compared to September last year.

5. Popular Project Analysis

5.1 DeFi category

• GMX: Decentralized perpetual contract trading platform, TVL reaches 496 million USD
• Camelot: Native DEX with features like customizable trading fees.
• RDNT: Cross-chain lending protocol, TVL exceeds AAVE V3 on Arbitrum's version

5.2 Game category

• Treasure DAO: Building a "decentralized Nintendo" ecosystem for blockchain games
• Trident: Proposed "Risk To Earn" GameFi economic model

6. Future Outlook

Arbitrum will continue to optimize technology in the future, support the development of ecological projects, and attract users through token issuance. The main directions include:

• Further reduce costs and improve TPS
• Push into the decentralization process
• Enrich the DApp ecosystem, especially in the fields of social and NFTs.
• Improve the token economic model and governance mechanism

2023 is expected to be a year of continuous growth for Arbitrum, worth keeping an eye on.