Arbitrum Orbit, First Visualization Of Layer 3 Concepts

Polygon and BNB Chain rushed to deploy L2, Arbitrum staggered and brought everyone into the layer3 era. Arbitrum Orbit represents a future Layer 3 vision alongside zkSync, StarkNet, or Optimism’s Superchain. Is Arbitrum’s move any time soon? What impact will it have on the Arbitrum ecosystem?

The rapid growth of the Arbitrum Ecosystem

Arbitrum is currently the Optimistic platform in particular, and Layer 2 is the most successful, with the number of TVL leading, the number of transactions & active users also outperforming the competitors below. Except, Optimism is clinging fiercely. Platforms like Boba Network and Metis DAO have been far behind, and zkRollup platforms are just starting to kick in.

TVL of the entire Arbitrum ecosystem is still at a relatively high level but is showing signs of decreasing after peaking in early May 2023, but this decrease is minor. Arbitrum’s current TVL level equates to the peak of the last bull cycle.

Arbitrum itself is also constantly changing and upgrading to maintain its position. Most recently, in March 2023, Arbitrum continued to announce that it would soon upgrade the Arbitrum network from Nitro to Stylus with many notable updates.

Offchain Labs has built a diverse ecosystem of different technologies to suit projects and developers with additional needs:

• Arbitrum One, Nitro & Stylus: These are Layer 2 platforms based on Optimistic Rollup technology that is often suitable for projects in the field of Finance. Arbitrum One was the version that was first released and then upgraded to Arbitrum Nitro, and Arbitrum Nitro further upgraded to Arbitrum Stylus.
• Arbitrum Orbit: Are Layer 3 platforms built on the Optimistic Rollup platform above. Arbitrum Orbit is free to choose in terms of scalability and data availability.
• Arbitrum Nova: Is a Layer 2 platform using AnyTrust technology with minimal security from Ethereum but has much greater scalability than using Optimistic Rollup.
• It can be seen that each product built by Offchain Labs targets different market niches Arbitrum with Optimistic Rollup technology is suitable for DeFi segment, and Arbitrum Nova is suitable for NFT, Social, and Gaming segment. And Arbitrum Orbit will be ideal for specialized Dapps in NFT, Trading, Gaming and Social.

What is Arbitrum Orbit?

Arbitrum Orbit are blockchains built on the Arbitrum Nitro platform with Arbitrum Orbit Trading, NFT or Gaming projects on Arbitrum Nitro that can be developed on a private chain thanks to Arbitrum Orbit technology to take full advantage of the transaction speed. Extremely high transaction costs and low transaction costs. Arbitrum Nitro will act as Layer 1 of the Arbitrum Orbit.

When building Layer 3 on Arbitrum Nitro, developers have several options:

• Arbitrum Rollup: Building a Layer 3 using Rollup technology like Arbitrum One will give priority to security, but scalability is also solved quite thoroughly.
• Arbitrum Anytrust: Build a Layer 3 using Anytrust technology similar to Arbitrum Nova. This Layer 3 will focus on scalability with extreme speed comes with almost zero cost but a little security trade-off.
• Make Modifications: Projects that want to develop in the direction that DApps specializing in a certain area such as dYdX or Immutable X have done, can choose the core technology of Arbitrum Nitro.
• Any individual, group or organization can deploy a Layer 3 on Arbitrum Nitro on their own, but launching a Layer 2 on Ethereum (similar to the Arbitrum fork) requires submitting a proposal to the Arbitrum DAO.

Besides, when Arbitrum Nitro upgrades from Nitro to Stylus, Layer 3 will be supported normally. With Stylust, building on Arbitrum Stylus will be much easier when there are more choices of programming languages such as C, C++ and Rust.

What problems does Arbitrum Orbit solve?

A decentralized network of nodes supports the Ethereum ecosystem, each running Ethereum’s Layer 1 (L1) client software. Ethereum’s block space is in high demand, so users are often stuck waiting for the network to become less congested (and, thus, less expensive).

Arbitrum’s Rollup and AnyTrust protocols address this challenge by offloading some of the heavy lifting of the Ethereum network to another decentralized node network that supports the Arbitrum One and Arbitrum Nova L2 chains, respectively.

There are important differences between these chains. Choosing between Rollup and AnyTrust represents a trade-off between decentralization and performance:

• Arbitrum One implements the Rollup protocol, storing raw transaction data on Ethereum L1, while
• Arbitrum Nova implements the AnyTrust protocol, which uses data availability committees (DACs) to store raw transaction data, expedite settlement, and reduce costs by making security assumptions.
• These two public chains will cover most projects’ needs – they already support thousands of applications and millions of users! But the shared public chain is not for everyone. Some projects may benefit from their own AnyTrust or Rollup chains that offer similar security, but with a higher degree of control over chain features and governance (remember, L2 chains public and their protocols are managed by the Arbitrum DAO).

Orbit chain gives you the ability to create your own AnyTrust and Rollup chains using your own infrastructure. You can think of your Orbit chain as a self-regulating priority lane on Ethereum. Each Orbit chain is capable of supporting many times the capacity of Ethereum, while directly benefiting from Ethereum’s security.

What’s next?

In essence, all ecosystems are trying to gain an edge to gain a lot of market share. The competition between chains focuses on grabbing developer resources. This goal is most effectively supported through open solutions and standardized tools.

Arbitrum technology powers the most secure L2s, and you can use this same pool of mature technology for your Orbit chain. Orbit lets you choose between Rollup, AnyTrust, or a custom technology stack. This makes the Ethereum and Arbitrum technologies more acceptable by allowing you to incorporate only the elements of the technology that you need.

You may need dedicated throughput if your dApp requires high performance or consistent resource availability. Running your dApp on its own Orbit chain greatly increases resource availability, so you don’t have to compete for compute and storage resources.

Arbitrum Orbit will have the same compatibility with EVM+ that Stylus introduced. This means you’ll be able to deploy EVM-compatible smart contracts using Solidity, C, C++, and Rust – no need to move away from the language and toolchain you’re using.

The introduction of Arbitrum Orbit is a crucial piece for the Arbitrum ecosystem. Updates like Stylust or the addition of Ethereum’s EIP 4488 will also be difficult to reduce fees on Arbitrum because currently the upgrade rate is slower than the network’s development rate. Trading or NFT-friendly protocols such as GMX, Treasure DAO, Dopex,… can use Arbitrum Nitro technology to build Layer 3 specialized in DApps.

Currently, all individuals, groups, or organizations can immediately build their own Layer 3 with many options on Arbitrum Nitro.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Foxy

Coincu News