What is Arbitrum Orbit? Arbitrum Orbit is the latest Blockchain platform introduced by Arbitrum after the launch of Arbitrum One and Arbitrum Nova respectively. Arbitrum Orbit represents a future Layer 3 vision alongside zkSync, StarkNet or Optimism’s Superchain. So, if there’s anything interesting about Arbitrum Orbit, let’s all find out in the article below.
To better understand Arbitrum Orbit, people can refer to some of the articles below:
- What is Arbitrum (ARB)? Arbitrum Cryptocurrency Overview
- What is Layer 3? Overview of Layer 3 Solutions
- What is Layer 2? Complete Guide to Layer 2 Solutions
What is Arbitrum Orbit?
Arbitrum’s current landscape
As of the time of writing in June 2023, Arbitrum is the most successful Optimistic and Layer 2 platform in particular with the leading number of TVLs, number of transactions & active users also surpassing the competitors below. Except, Optimism is clinging fiercely, platforms like Boba Network, Metis DAO are already far behind or zkRollup platforms are just starting to launch.
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. You can read about the Stylus update at What Is Stylus? All About Arbitrum Stylus Update to better understand this update.
However, if you have observed Arbitrum since its inception, the picture of the Arbitrum ecosystem still lacks a vision of Layer 3 if Optimism has announced OP Stack and Superchain vision, zkSync also shared about Hyperchain & Hyperbridge,… but Arbitrum remained silent until March 2023, when Arbitrum first shared about Arbitrum Orbit with Layer 3 vision.
Overview of Arbitrum Orbit
Operational model of Arbitrum Orbit
Arbitrum Orbit are Blockchains built on the Arbitrum platform, Trading, NFT or Gaming projects can develop on a separate chain thanks to Arbitrum Orbit technology to take full advantage of extremely high transaction speed and cost. cheap transaction. Arbitrum will act as Layer 1 of Arbitrum Orbit.
When building Layer 3 on Arbitrum, developers have a number of options as follows:
- 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 extremely high speed at almost zero cost but with a slight trade-off in security.
- Make Modifications: Projects that want to develop in the direction of DApps specializing in a certain area like dYdX or Immutable X have done can choose the core technology of Arbitrum Nitro.
Besides the scalability customizations in using different technologies such as Anytrust Sidechain or Optimistic Rollup, Orbit Chain developers also have a number of customizations such as:
- Customize privacy.
- Customizing tokens as transaction fees means Orbit Chains have the right to decide to use ARB, ETH or their own Native Tokens as transaction fees.
- Customize network and community administration.
- Customize Data Availability when choosing Layer 2 as Arbitrum One or Arbitrum Nova.
Any individual, group or organization can independently deploy a Layer 3 on Arbitrum, but launching a Layer 2 on Ethereum (similar to forking Arbitrum) 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 as there are more options for programming languages such as C, C++ and Rust.
Opportunities open for protocols on Arbitrum
The introduction of Orbit is a vital piece to the Arbitrum ecosystem. Updates like Stylust or coming with Ethereum’s EIP 4488 will also be difficult to reduce fees on Arbitrum because the current upgrade speed is slower than the network’s development rate. Good trading or NFT protocols such as GMX, Treasure DAO, Dopex,… can use Arbitrum Nitro technology to build Layer 3 specializing in DApps.
If moved from Layer 2 to Layer 3, protocols such as GMX, Dopex, Treasure DAO,… will be even easier to reach users in the near future.
Arbitrum Orbit development roadmap
Currently, all individuals, groups or organizations can immediately build their own Layer 3 with many options on Arbitrum. Orbit’s development roadmap has the following notable points:
- July 2023: Offchain Labs officially introduces the Framework for Orbit Chains to help developers easily build a Layer 3 platform on Arbitrum.
- August 2023: Offchain Labs officially launches the Stylus upgrade with many features only available on Arbitrum today.
Arbitrum Orbit Ecosystem
The Arbitrum Orbit ecosystem was started by some prominent names such as:
- July 2023: The first project built on Arbitrum Orbit was introduced as XAI – a Blockchain platform dedicated to Gaming.
- September 5, 2023: Caldera – Rollup As a Service platform, introduced to the community 3 projects that will participate in Arbitrum Orbit including Syndr, Volatilish and Sanko Game Corp.
Distinguishing Offchain Labs’ Product Lines
Offchain Labs has built a diverse ecosystem of different technologies to suit projects and developers with different needs:
- Arbitrum One, Nitro & Stylus: These are Layer 2 platforms based on Optimistic Rollup technology, often suitable for Finance projects. Arbitrum One was the first version released then upgraded to Arbitrum Nitro and Arbitrum Nitro continued to upgrade to Arbitrum Stylus.
- Arbitrum Orbit: Are Layer 3 platforms built on the Optimistic Rollup platform above. Arbitrum Orbit has freedom of choice regarding 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 the DeFi segment, Arbitrum Nova is suitable for the NFT, Social and Gaming segments. Arbitrum Orbit will be suitable for Dapps specializing in NFT, Trading, Gaming and Social.
Summary
It can be seen that the Layer 2 battle is becoming extremely fierce. We cannot yet conclude that Optimistic Rollup will lose to zkRollup in a long-term battle because when zkRollup is completed and goes into stable operation, Layer 2 of At the same time, Layer 3 of Optimistic Rollup solutions was also in a similar state.
It will be difficult to compare Layer 3 of Optimistic Rollup with zkRollup so we still have to continue to observe more to find investment insights.
