Layer2 competition is heating up, how can Arbitrum continue to break through?

Author: Plain Language Blockchain

This year, Ethereum L2 has experienced explosive growth, similar to the previous public chain boom, with numerous projects beginning to lay out their strategies in the Layer2 space. As an expansion player in the Optimistic Rollup track, Arbitrum gradually stood out this February with its Airdrop event.

We interviewed the team behind Arbitrum, Nina, Head of APAC at Offchain Labs, Jason, Engineer at Offchain Labs APAC, and Shin, Head of the Chinese Community at the Arbitrum Foundation, to hear their thoughts on how Arbitrum is responding to the fierce competition from various newcomers in the Layer2 space, as well as their views on the future evolution of the entire Layer2 landscape.

1. As the leader in the Layer2 space, how does the Arbitrum team view the evolution of Layer2 within the Ethereum and blockchain ecosystem, and its impact on the entire crypto industry?

Offchain Labs: The existence of Layer2 is to enable the scaling of Ethereum while ensuring security and decentralization. Therefore, when Arbitrum launched its first version, it already had a complete fraud proof. Since then, Offchain Labs has made multiple updates to its tech stack, introducing Nitro, Stylus, and Bold.

In addition, for developers, most Layer2 solutions use EVM, which allows them to easily meet the scaling needs of projects on Layer1 without any code modifications, enabling them to deploy products to Layer2 using existing tools. For users, Layer2's significantly lower gas costs and extremely fast transaction confirmations allow them to experience web2-like user experiences in web3 products. It can be imagined that with continuous technological improvements in Layer2, more users and developers will enter the Layer2 ecosystem in the future.

2. We see that the competition in the Layer2 space is very intense right now, with ZkSync, Starknet, and others experiencing rapid growth in user numbers and TVL due to Airdrop expectations. Base, as a newcomer backed by resources like Coinbase, has emerged as a dark horse. How does Arbitrum respond to the increasingly fierce competition in the Layer2 market?

Offchain Labs: If you want to have a billion users, you must first have a million developers. The new tech stack Stylus developed by Offchain Labs for Arbitrum, if approved by DAO voting, will allow developers to deploy programs written in Rust, C, and C++ on Arbitrum. There are an estimated 3 million Rust developers and 12 million C++ developers online. Through Stylus, Arbitrum can open a new door for the Ethereum ecosystem beyond the existing 20,000 Solidity developers.

Previously, other public chains' EVM and WASM did not share the same state, so newly added WASM developers could not interact with the existing EVM ecosystem. The introduction of Stylus (EVM+) breaks this limitation, allowing EVM developers and WASM developers to build together in the same ecosystem without being restricted by the ecosystem.

3. The Arbitrum team recently launched a significant tech stack called Stylus. Can we understand Stylus as a killer feature introduced to respond to the current fierce competition in the space? What impact might it have on the entire track?

Offchain Labs: As mentioned in the previous question, we hope to see more Web2 developers enter the Web3 industry. The three languages mentioned have far more developers and tools than Solidity. Additionally, for existing Web3 developers, they can incorporate libraries written in WASM contracts into their own contracts, and WASM contracts can easily interact with Solidity contracts, even rewriting and upgrading existing Solidity contracts, allowing contracts to run more efficiently and at lower costs. This will further reduce user expenses, enhance blockchain performance, and foster more innovative applications.

4. Currently, the Arbitrum ecosystem can be said to be the most mature and rich ecosystem in the entire Layer2 space. However, ecosystems like Base have recently emerged with some very hot projects. In a bear market, competition is more about the existing market share. What are your thoughts on the competition between Layer2 project ecosystems? What new actions might Arbitrum take in the future?

Offchain Labs: I believe the competition in this field is healthy and beneficial for users. We do not mind competition, and we also believe that Arbitrum has the best technology and Ethereum scaling solutions.

Offchain Labs will continue to progress alongside Arbitrum, providing users and developers with the best technology and products, ensuring they can confidently choose Arbitrum. We have already launched the testnet for Stylus and the testnet for Orbit deployment. In the future, we will continue to pay attention to user feedback while using the testnet and provide the best user experience when launching on the mainnet. Additionally, we are researching the decentralization of sequencers, and we will provide detailed plans in the near future.

5. The ignition and development of high-quality native projects are crucial for the Layer2 ecosystem. Looking back, what do you think are the reasons for Arbitrum being able to produce enduring native projects like GMX? Do you see any replicable points in this path?

Offchain Labs: Arbitrum has one of the strongest DeFi ecosystems besides Ethereum. Many innovative and high-quality projects choose to deploy on Arbitrum because it has a strong community and other projects they want to collaborate with. Moreover, projects and communities on Arbitrum are very willing to collaborate to build a good ecosystem and products together. We also place great importance on developers, continuously improving developer tools, such as providing a complete Arbitrum Tutorial for newly joined community projects, and offering the Arbitrum SDK for developers already working on Arbitrum. These will reduce the extra workload for developers when developing on Layer2, making it easier for them to get started.

6. Currently, many Layer2 projects are launching Layer3, and Arbitrum is no exception. What are your views on the prospects and development of Layer3?

Offchain Labs: Arbitrum has also launched its own Orbit Chains (L3). Orbit Chains not only have low fees and low latency but also allow for customization regarding gas, privacy, and other aspects. Users can choose to use Rollups or Anytrust mode while using Orbit, and they can also select Arbitrum One or Arbitrum Nova as their DA chain. For gas tokens, users can customize gas tokens other than ethers, and for any future technical stack upgrades of Arbitrum, Orbit can choose whether to upgrade. We believe that in specific areas, the development of Layer3 may even surpass that of many Layer2 solutions.

7. Previously, there were many voices suggesting that Zk-rollup is the optimal solution for Layer2. What are your thoughts on this?

Offchain Labs: While Zk-rollups can achieve quick finalization through zero-knowledge proofs, their large proof computation overhead and performance bottlenecks will lead to ZK-rollups being weaker than Optimistic rollups in terms of performance and cost, at least for now. We want to provide users with technological solutions that meet current market demands, and Optimistic rollup is currently the solution that best meets market needs. Arbitrum's technology is also continuously evolving, and we are researching cutting-edge technologies in the ZK field. When ZK technology matures, we may also integrate it into our product line.

8. Finally, can you share Arbitrum's future development path and vision?

Offchain Labs: Offchain Labs will continue to advance the technology development for Arbitrum. The immediate focus is to launch the official version of Stylus, deploy a permissionless validator version (BOLD developed by Offchain Labs), and decentralize the Sequencer to provide users with a high-performance and secure Layer2. Of course, all of these will require DAO voting to be adopted on Arbitrum.

Additionally, the Arbitrum Foundation recently launched two initiatives: a grant program and a student ambassador program. The grant program will periodically provide grants to different categories of projects/organizations within the Arbitrum ecosystem. The current phase targets dapps and infrastructure being developed on the Arbitrum chain. The student ambassador program aims to empower students to represent Arbitrum in their universities and local communities while building their personal visibility and influence.

In the near future, the foundation will also launch a new phase of the ambassador program, open to non-student community members and technical personnel.

Whether now or in the future, we are very much looking forward to seeing more friends from the Greater China region actively participate in these initiatives!