Top 10 Arbitrum-Based Protocols

What Does Arbitrum Imply?

Arbitrum, a layer-2 scaling solution for Ethereum, employs optimistic rollups. It is an alternative layer-2 scaling for Ethereum devised to enhance velocity, expandability, and cost-effectiveness. It has experienced tremendous proliferation since its belated 2021 launch and is presently the most prevalent L2 solution by Total Value Locked (TVL).

What Are the Processes in Arbitrum?

Arbitrum utilizes optimistic rollups to mitigate Ethereum’s congestion. As indicated by the designation, it encompasses batching transactions, off-chain corroborating those batches and dispatching the ultimate transaction back to Ethereum. Consequently, Ethereum treats the batch as a solitary transaction rather than validating each transaction individually.

Optimistic rollups are deployed because individuals mistakenly presume that off-chain transactions are legitimate. Following this, they are not compelled to submit their proofs on-chain.

Optimistic rollups employ dispute security techniques that bestow challengers’ specific durations on rollup transaction outcomes. When an error is exposed, the person in charge of the results is penalized, and the transactions are reattempted. This occurs when someone contests the outcomes (by presenting fraud proofs) during a dispute time frame of at least seven days.

 

Top 10 Arbitrum Protocols by Aggregate Value Locked:

1. Uniswap v3 DEX
2. Aave v3 Lending and Borrowing
3. GMX Decentralized Perpetual Exchange
4. Radiant Capital Cross-Chain Lending and Borrowing
5. Stargate Finance Cross-Chain Bridge
6. Curve Finance DEX
7. Sushi DEX
8. Balancer V2 DEX
9. Beefy Yield Aggregator
10. Camelot DEX

Conclusion

More protocols are developing on the L2 solution because its architecture is advantageous to many developers.
However, some believe that zk-rollups are superior scaling options (including Ethereum founder Vitalik Buterin). As additional zk-rollup solutions hit the market, the market situation may alter soon.
Multiple L2s surviving is implausible, in our opinion. The market will probably narrow to one or two significant winners. The project Arbitrum can greatly scale Ethereum and is thus far looking good. As it keeps expanding and changing, it’s important to keep tabs on it.

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