On February 10, according to L2BEAT data, the total amount of crypto asset locks (TVLs) in the Ethereum Layer 2 sector was $6.29 billion, up 11% in 7 days. Among the many second-tier expansion solutions of Ethereum, THE ARBITRUM chain TVL ranked first, reaching $3.37 billion, accounting for more than 50% of the total TVL in the sector.
Arbitrum's ability to attract a large number of crypto asset locks is mainly due to the prosperity of its on-chain ecology. Since the launch of the mainnet Orbitrum One in September last year, the top DeFi protocols Uniswap, Sushiswap, Curve and other applications on the Ethereum Layer1 mainnet have been integrated and deployed on The Orbitrum One. The influx of well-known DeFi applications also shows that developers are optimistic about The Orbitrum scaling solution.
In a variety of Layer2 solutions, Rollup technology is the core of the inextricable, Arbitrum is no exception, the development team OffchainLabs retained the technology, so that the technology "off-chain processing of the actual calculation and storage of smart contracts, on-chain storage of transaction data" characteristics of play out, while ensuring the security of on-chain assets, accelerate network processing efficiency, reduce Gas fees.
Optimistic Rollup, ZK Rollup and other Layer2 solutions use Rollup technology, why can Arbitrum become the first choice for deFi application migration?
This brings us to Arbitrum Rollup's determination in terms of Ethereum compatibility, which supports full compatibility with the Ethereum virtual machine EVM, and integrates developers to migrate DApps with one click without changing the underlying code. At this point, Optimistic Rollup is not yet 100% compatible, and ZK Rollup's Ethereum-compatible EVM is still under development.
Compatibility has improved the willingness of Developers and users of DeFi applications to migrate, and under the choice of traffic, major centralized crypto asset exchanges have begun to support the recharge and withdrawal of the Orbitrum mainnet.
As early as last November, Binance supported the charging and withdrawal of The Orbitrum main network ETH, which means that the user's assets in and out of Orbitrum are no longer only a way to cross the chain bridge, and the exchange has also become a charging channel. On February 8 this year, FTX also announced asset replenishments that support Orbitrum.
Asset access is becoming more and more convenient, and it is not surprising that Arbitrum's TVL has risen. It should be noted that the Gas fee on the Arbitrum chain is still settled by ETH, it does not issue any tokens, and users who want to participate in the ecology of the Arbitrum chain only need to have ETH.
So, on the Arbitrum chain, in addition to the deployment of mainstream DeFi protocols such as Uniswap and Sushiswap, what other applications are there? In this issue, DeFi Cellular will take stock of the application status on the Orbitrum chain.
Cross-chain bridge Hop Protocol that targets Rollup pain points
Brief introduction
Hop Protocol cross-chain bridge mainly supports the transfer of crypto assets between the Layer2 (L2) network and the Layer1 (L1) network, and currently only supports L2 expansion networks using Rollup, such as Arbitrum, Optimism, Ethereum side chain Polygon, etc., and the assets that support transfer are ETH, USDT, USDC, DAI, MATIC, etc.
The emergence of Hop Protocol cross-chain bridges is related to the current cross-chain pain points of assets. Despite the large number of cross-chain asset demands of users, the ease of use of the L2 cross-chain bridge using Rollup technology is not so smooth - a single transfer from Layer 1 to Layer 2 can take ten minutes or even days, and gas fees and fees are extremely expensive. In addition, some Ethereum sidechains and Rollup L2 are also isolated, and it is more difficult for users to cross assets from sidechains to L2, which accelerates the rise of third-party cross-chain bridges.
The Arbitrum mainnet has an official original cross-chain bridge, which is more secure, but the experience is not good. For example, arbitrum Bridge supports a limited variety of assets to be transferred, and currently only supports ETH and ERC20 assets on the Ethereum mainnet to go to the Orbitrum mainnet, but does not support the transfer of assets in other L1 public chains such as BSC and avalanche protocol. Also, assets are easy to get into Orbitrum, but hard to get out — if a user's asset wants to return to Ethereum from the Orbitrum mainnet, it takes a 7-day waiting period.
The cross-chain bridge Hop Protocol hopes to solve not only the problems of asset transfer and efficiency from L1 to L2, but also the "island problem" between L2 expansion schemes, and fully open up the cross-chain channel of assets.
Operational mechanism
Common cross-chain assets are mainly completed in the form of "asset mapping", that is, when an asset needs to cross from chain A to chain B, the contract can automatically mint the asset on chain B, and "destroy or lock" the same amount of asset on chain A, so as to ensure that the actual supply of the asset will not increase or decrease due to cross-chain. For example, WBTC is the Ethereum version of BTC (ERC20 standard), which maps BTC 1:1 on the Bitcoin network to Ethereum through cross-chain bridges.
The operating mechanism of Hop Protocol is different, this cross-chain bridge designs "h" assets (h-Assets) as intermediate assets, and combines the automatic market maker (AMM) mechanism commonly used by decentralized exchanges to achieve cross-chain and rapid circulation of assets.
Hop Protocol is cross-chain
When using Hop Protocol cross-chain, the user deposits the assets of Chain A into the contract, mines "hAssets" with a 1:1 mortgage, and then replaces "hAssets" with the same assets destined for Chain B.
For example, when a user transfers a USDC from an Arbitrum chain to an Optimism chain, the Hop Protocol's workflow is:
1. With the help of the AMM pool on the Arbitrum chain, Hop Protocol cast USDC as "hUSDC";
2. Cross the "hUSDC" to Optimism and exchange "hUSDC" for USDC through the AMM fund pool on the Optimism chain;
3. The user receives USDC on Optimism.
Hop Protocol dares to use the AMM pool on the chain because there are intermediate assets "hAssets" as a guarantee, which solves the efficiency problem of assets across the L2 and L1 chains, especially when users exit from L2 networks such as Arbitrum and Optimism, which can achieve instant arrival without waiting periods.
Hop Protocol is currently a popular cross-chain bridge on the Orbitrum chain, and the reason why it has attracted attention is not only for the experience of use - it does not currently release any tokens. Some users want to use the Hop Protocol to blog a future space for the application token.
GMX is a decentralized perpetual contract trading application
GMX is a decentralized perpetual contract trading application built on the Orbitrum chain, users only need to link the wallet, no need to register an account to trade, support cross-chain operations, it has been deployed on the L1 network Avalanche chain in September last year.
GMX official website
There are two main modes of decentralized futures contract trading applications, one is the order book model represented by dYdX, which uses the fund rate mechanism to balance the positions of long and short positions, similar to the centralized contract exchange (CEX) model; the other is the AMM (automatic market maker) model represented by Perptual (PERP), often referred to as the "contract version of Uniswap".
GMX is different from the above two models, in the mode of trading funds, instead of choosing the "trading pair" method, it uses a multi-asset pool "GLP" (GMX Liquidity Provider) for users to perform exchange and leveraged transactions, which is composed of GMX liquidity providers (LPs).
The trading process of GMX is not the past long-short duel, but a three-party game of multi-party, short-party and "GLP", and the counterparties of multi-party and short-party are GLP pools.
Trading users can start trading after depositing USDC, ETH or WBTC as margin in GMX. Currently, GMX supports up to 30 times leveraged trading on BTC and ETH, and the transaction is traded in real time according to the oracle price, and the proceeds can be withdrawn in real time.
GLP is not only the name of the capital pool, but also a special token formed by the proportional combination of BTC, ETH, USDC three assets, GLP holders are liquidity providers, but also the counterparties of platform trading users, that is, all transaction counterparties are GLP holders.
To become a GLP, users can purchase GLP through a single asset such as BTC, ETH, USDC, etc., and deposit it into the GLP pool. Since liquidity can be provided by providing a single asset, there is no need to consider the usual impermanent losses of LPs.
Since GLP holders provide liquidity for leveraged trading, and all counterparties to trades are GLP, there is still a zero-sum game between GLP and contract traders – when a leveraged trader loses, the margin is directly distributed to GLP and the GLP holder makes a profit; when the leveraged trader makes a profit, the trader also earns profits from GLP, and the GLP holder will lose.
Holding gLP can also get a share of the transaction fee of the GMX application in addition to the token reward of the GMX application.
GMX is also the platform's token code of the same name, with a total supply of about 13.25 million, tentatively reported at $44.4, it is a practical token that can be used for voting governance.
Metaverse ecosystem Tree DAO
Treasure DAO is a metaverseal base layer platform on Orbitrum that incorporates NFT, DeFi, and GameFi applications. Treasure DAO hopes to support the NFT and meta-universe projects to build their own ecology and achieve integration between projects.
The reason for this vision is that the current NFT projects are independent of each other, the NFT assets are not interoperable, and the NFT projects that run alone and lack composables may not be able to grow long after the heat has passed, and the Lot system that has appeared on Ethereum tries to solve this problem, and the Tree DAO is the project that appears in the Root community.
It draws on the composability of Lot NFT to try to bridge the many closed NFT projects, connecting NFT assets and applications to games and metaversities.
Treasure DAO official website
At present, the Treasure DAO ecosystem is mainly composed of three parts: GameFi games, NFTs, and token MAGIC.
- Token MAGIC is a native token of Tree DAO, first released in September 2021, with a total supply of 350 million, tentatively reported at $4.20.
- In the early days, users could obtain MAGIC by staking out a Lot NFT. At present, the way of pledge mining has stopped, and players can get MAGIC rewards by staking a pledge.
- MAGIC is the core asset of the Tree DAO ecosystem, which can be used to purchase NFTs, have the role of payment medium, and can also be used to participate in the game by consuming MAGIC to participate in the game or upgrade the forging of characters in the game, generate new resources and so on.
- MAGIC is a limited resource in the Tree DAO ecosystem, the number of outputs will be less and less, participants to get the scarce MAGIC, the more number also means that you have more energy in the Tree DAO ecosystem. Treasure DAO is also building various stories around the acquisition of MAGIC.
- "Bridgeworld" is the original game of the Tree DAO ecosystem, with the theme of business strategy, trade and domination, and is also the center of the Tree DAO metaverse.
- In this game, "Legion" is the hero character of the game and an important NFT asset, and the player enters the game as a legion. Legions can be purchased in the NFT Marketplace or obtained through Summons. Players can earn the bonus attribute "Treasure NFT" by arranging the legion to do missions, which contains various magical items such as masks, elixirs, etc. Players can generate new resources or items with treasure NFTs, or pledge treasure NFTs and clan NFTs to earn MAGIC rewards.
- BridgeWorld is a resource that connects narratives to metaversal spaces, which provides the basis for building other games, such as the ability for players to build new stories and games for Treasure Tree NFT or Legion NFT.
- In addition to original NFT games, TreasureDAO also accepts external NFT projects, two of which are SmolBrains and Smol Bodies.
- "Smol Brains" is a series of pixel images of monkey heads, which were originally used by users to cast NFT images for free, but because of its game attributes, it is loved by players, becoming the most popular NFT project in the NFT market within Tree DAO. In this game, the player can increase the monkey's IQ (IQ) by staking the SmolNFT, and the IQ level is displayed in the size of the monkey's head, and the higher the IQ, the larger the head. Players can also spawn new baby monkeys by breeding with other baby monkeys to mine MAGIC. Currently, the floor price of Smol Brains is 1869 MAGIC, which is about $7960.
- "Smol Bodies" is a pixel style body picture, the pledge of Smol Bodies NFT can make the muscles of the limb stronger and stronger, the current floor price of the NFT is 1182 MAGIC.
- TreasureDAO incorporated the "Smol series" NFTs into its own metaverse world and wrote it into its own development route. As shown on Bridge World's official roadmap, its rare NFTs will be integrated with the Smol series.
- The successful operation of the Smol series NFTs has also made Tresure DAO an incubator for the new NFT projects, forming a complete construction chain from the birth, operation and follow-up story of the project. TreasureDAO is also known as the "NFT Launch Platform" by users, and the cooperative NFT project can not only obtain the support of initial resources, but also have the opportunity to integrate into the metaverse ecology of Tree DAO in the later stage.
- In the NFT marketplace of Tree DAO, players can use MAGIC as a means of payment to buy and sell NFTs in the ecosystem. Recently, Treasure DAO launched Trove Marketplace, a new platform for NFT trading, where users can use ETH to purchase NFTs, which attempts to become "OpenSea" on the Layer2 network.
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Are you optimistic about the Orbitrum Rollup expansion plan?