Why do I have confidence in Arbitrum in Layer 2 scaling solutions?

This article was published on RealSatoshi, author: 0xSoros.

The voting for the deployment of Uniswap V3 on the Ethereum Layer 2 network Arbitrum has received overwhelming support, and Arbitrum will open its mainnet to developers on May 28. Seizing the opportunity, I will also take the time to learn more about Arbitrum.

Currently, the three most popular scaling solutions in the Ethereum community are Optimism, Arbitrum, and Matic. In terms of orthodoxy/community ecosystem/compatibility, Arbitrum is a relatively balanced solution.

In terms of orthodoxy, Optimism is the scaling solution endorsed by Uniswap, after all, it has the support of two major backers, Paradigm and A16Z. The benefits should stay within the family, so their own projects naturally use their own solutions. Matic, on the other hand, follows a rural encirclement strategy. From a technical perspective, Matic is not a true Layer 2; it can only be called a sidechain. However, Matic has created a powerful ecosystem through its vigorous growth, incentivizing tokens and performing well in the secondary market. Arbitrum balances both aspects; it was originally an academic project from Princeton University, and after considering that the project had entered a mature stage in the community, it resolutely chose to abandon its patent.

In terms of community ecosystem, Matic's strong community attributes are undeniable. Whether it's first-tier or second- and third-tier projects, Matic generally collaborates with them to migrate to the Matic Layer 2 network. If we were to create a map of Matic's ecosystem partners, it would look quite impressive at first glance due to the sheer number of collaborations, resembling an ecological empire. However, upon closer inspection, the standout projects are mainly AAVE, which contributes a significant portion of the Layer 2 locked value to Matic. In contrast, Optimism has high requirements for collaborative projects, with top projects and orthodoxy being two key characteristics, specifically Uniswap and Synthetix.

Arbitrum, however, balances both. In terms of orthodoxy, Arbitrum's requirements are not as strict as Optimism's, allowing it to accommodate more projects. Arbitrum is supported by surrounding infrastructure such as Metamask, Chainlink, and Truffle, and its ecosystem partners include Bancor, MCDEX, Hop Protocol/Connext (for fast Layer 2 withdrawals), and the latest Uniswap.

It's worth mentioning the projects Chainlink and MCDEX.

MCDEX, as the first officially recognized project to migrate to Arbitrum, has been supporting Arbitrum since Q3 of last year. They chose to partner with them, presenting business needs, helping them connect resources, and actively introducing Arbitrum to project parties. MCDEX and DODO, as two leading DeFi projects in China, will be among the first to support Arbitrum.

Chainlink also has a good relationship with Arbitrum. Influential figures in the LINK community, such as Chainlinkgod, are actively promoting Arbitrum. Firstly, Chainlink and Arbitrum have reached a collaboration, with Arbitrum using Chainlink's oracle services. Secondly, the Arbitrum logo is very similar to LINK, which has become a meme point.

In terms of compatibility, Arbitrum is fully compatible with EVM. Regarding technology, I will directly use the views of Professor Min Dao:

"Optimism's lack of 100% EVM compatibility is a major strategic misjudgment. Not to mention the delayed market launch, these people don't understand that 99.9% compatibility and 100% incompatibility are essentially the same. From this perspective, BSC, Polygon, and Arbitrum have a clear understanding. Those working on public chains must go deep into the front lines; a strategic misstep can lead to total failure."

And a friend's perspective from the MCDEX community:

"Arbitrum's architecture is more reliable than Optimism's, especially given the current state of EVM being quite poor. Optimism's container architecture has no advantage; it's better for Arbitrum to directly separate a layer in the middle and create a virtual machine to simulate EVM."

From the above viewpoints, we can glimpse that EVM compatibility plays a crucial role in whether Layer 2 solutions can be widely adopted and thus form an ecosystem.

Nowadays, we often mention the term Legitimacy. Vitalik recently wrote an article stating that the most scarce resource in the blockchain industry is Legitimacy, which refers to orthodoxy and legality. However, my point of confusion is whether having orthodoxy and legality truly makes one invincible and whether it can be a one-time solution. Does a project with strong orthodoxy necessarily win? Clearly, in the emerging early blockchain industry, having orthodoxy does not equate to having everything. Projects that are not so orthodox can still leverage their strong community power to emerge as dark horses.

However, we cannot deny that as the blockchain industry matures, projects are indeed competing based on their lineage. Players who have gained initial capital accumulation will gradually shift from an aggressive and adventurous style to seeking investment opportunities in orthodox projects. Orthodoxy provides a sense of safety and reliability; backing from large institutions, strong technical teams, and robust financial support means a higher probability of achieving good investment returns.

This article does not intend to praise Arbitrum while disparaging Optimism. Both are the most promising scaling solutions in the Ethereum ecosystem, and a diverse ecosystem is naturally the best. Perhaps there is no best solution; the key is whether the ecosystem can be built. First, let Uniswap run on Layer 2.

In summary, I am very optimistic about and look forward to both Optimism and Arbitrum.