Comprehensive Analysis of Layer 2 Scaling Solution Arbitrum: Technical Features, Ecological Development, and Future Prospects

1. Project Overview

Arbitrum is a layer two scaling solution based on Optimistic Rollup technology developed by Offchain Labs. It was initially an academic research project that transitioned to practical application after continuous optimization. Arbitrum uses economic incentives and fraud proofs to ensure the validity and security of transactions.

1.1 Core Technical Features

• Multi-round interactive fraud proof, reducing gas consumption for single challenges.
• Stronger compatibility with EVM, nearly 100% compatible
• Adopting WebAssembly architecture and Geth instead of custom AVM and EVM simulators
• ArbOS rewritten in Go, optimizing transaction batching and compression

2. Development Status

Arbitrum is currently the largest Layer 2 network by TVL, reaching $385 million, accounting for 55.97% of the total Layer 2 TVL. Its token $ARB was launched in March 2023, with an initial total supply of 10 billion.

3. Technical Upgrade

3.1 Arbitrum Nova

A new chain built on AnyTrust technology, specifically designed for gaming and social applications. It uses a data availability committee to manage off-chain data.

3.2 Nitro Upgrade

Improved network speed and reduced transaction costs. Major upgrades include:

• Use WebAssembly instead of AVM architecture
• Geth as an alternative to custom EVM simulators
• ArbOS rewritten in Go, optimizing batch processing and compression

3.3 Stylus

A new programming environment that supports deploying applications using languages such as Rust and C, fully interoperable with EVM.

4. Ecological Development

The Arbitrum ecosystem is rapidly developing, with leading DeFi protocols such as Uniswap and Curve deploying one after another. The Odyssey event held in June 2022 promoted ecological prosperity, resulting in a significant increase in new addresses.

5. Analysis of Popular Projects

5.1 DeFi projects

• GMX: A decentralized perpetual contract trading platform with a TVL of $496 million.
• Camelot: Native DEX, featuring customizable transaction fees and other characteristics.
• RDNT: Cross-chain lending protocol, TVL exceeds AAVE V3 Arbitrum version

5.2 Game Project

• Treasure DAO: Building a "decentralized Nintendo", including multiple on-chain games
• Trident: Proposed the "Risk To Earn" model of GameFi projects

6. Future Development

Challenges and Opportunities of the 6.1 Rollup Plan

• Improve user experience: reduce withdrawal waiting time, enhance interoperability
• Enhance capital efficiency: Address the issue of liquidity fragmentation.
• Enhance security: Promote decentralized operations, establish mandatory withdrawal mechanisms.

6.2 Arbitrum 2023 Outlook

• Continuous technological upgrades: decentralized sorters and validators
• Ecological Expansion: Support social and NFT projects, develop Arbitrum Nova
• Improve the economic model: launch tokens, optimize allocation and governance plans