On March 23, ARB tokens airdropped by Arbitrum to community users will be available for claim. According to the statistics of @Blockworks_ on Dune, the number of ARBs airdropped to community users is 1.162 billion, and the number of wallet addresses that have been airdropped is about 625,000, with an average number of ARBs airdropped per address of 1,859.
After Arbitrum announced the airdrop, major centralized exchanges such as OKX, Binance, and Coinbase competed to launch ARB tokens. Even before the official transaction, many people have begun to buy and sell ARBs obtained by airdrops over-the-counter, each ARB is sold for about $1.1-1.3, and the airdrop value is about $1320-$1560 according to the calculation of 1200 ARBs airdropped per wallet address. The wealth effect brought by ARB airdrop has made community users rejoice and inspired more users to participate in the ecology.
According to L2beat, on March 21, the total lock-up (TVL) of crypto assets in the Ethereum Layer 2 sector was $6.29 billion, of which the Arbitrum on-chain TVL was $3.85 billion, an increase of 21.2% in the past 7 days. In addition, the number and activity of its ecosystem users has not cooled due to the end of airdrop incentives, and Dune data shows that daily active users and trading volume on Arbitrum are still reaching new highs.
Arbitrum trading volume and daily active users
At present, the Arbitrum ecosystem has laid out the application of wallets, cross-chain bridges, DEX, lending, games, NFTs and other sectors. Especially in the DeFi sector, well-known mainstream applications such as Uniswap, Sushiswap, Aave, and Curve have been deployed on the chain. So, in addition to mainstream applications, what new applications and investment opportunities are there on the Arbitrum chain?
From a macro perspective, the Arbitrum ecology
Before introducing the specific project, we can have a more macro understanding of the Arbitrum ecosystem from the perspectives of tokenomics, DAO governance, and technical roadmap——
On the evening of March 16, the Arbitrum Foundation announced the launch of the DAO organization for Arbitrum One and the Arbitrum Nova network, the launch of the governance token ARB, and unveiled a community airdrop reward program.
The former, Arbitrum One, is a chain built using Arbitrum Rollup technology, and all transaction data is stored on the mainnet Ethereum, mainly used to build DeFi and NFT projects, which went live in 2021; The latter, Arbitrum Nova is a new mainnet based on AnyTrust technology, a network designed for gaming, social applications, and high-throughput DApp use cases, with transaction data stored off-chain, managed by the Data Council DAC, and launched in August 2022. At present, these two chains run independently in parallel, and the L2 and on-chain ecological applications we usually mention mostly run on the Arbitrum One mainnet.
The total initial issuance of ARB is 10 billion, with a maximum of 2% per year, of which the Arbitrum community will hold about 56%, which includes 11.62% airdropped to community users, 1.1% to DAO organizations, and the remaining community tokens will enter the treasury controlled by the new Arbitrum DAO, and how to distribute them will be decided by the votes of ARB holders; Another 44 percent will go to Offchain Labs, the development company that founded Arbitrum, as well as investors.
ARB allocation
ARB is a governance token that is not used to pay any fees on the Arbitrum chain. At present, the gas fee paid by users interacting on the Arbitrum chain is still ETH.
The ARB will be used to participate in the governance of the Arbitrum DAO, which will manage the Arbitrum ecosystem, including having decision-making power over the Arbitrum One and Arbitrum Nova chains and their underlying protocols. This means that ARB token holders can vote on key decisions of networks such as Arbitrum One and Arbitrum Nova through the Arbitrum DAO organization, including how to upgrade from the technology of the chain to how the revenue from the chain is allocated to support the ecosystem, allowing ARB holders to jointly decide and shape the future and direction of Arbitrum.
It is worth mentioning that Arbitrum's DAO governance is self-executing. Typically, most DAOs let governance token holders vote on proposals, and then the core team of the project executes the results by changing the network code. The difference between the DAOs set up by Arbitrum is that the codebase automatically changes based on the final voting results, which means that the DAO's vote on on-chain behavior will have direct authority to influence and execute its on-chain decisions, directly controlling the network.
Of course, there are some risks that if the bad guy changes the code through the voting process, then this will also be automatically updated in the code. To this end, the Arbitrum Foundation has also established a 12-member Arbitrum Security Committee, which can act quickly in emergency situations to ensure the security of the chain, such as finding serious and urgent errors in the software, and the security committee can act quickly.
In addition to airdrop announcements and the launch of DAO governance, Arbitrum has released a toolkit for developers, Arbitrum Orbit, that allows developers to easily build their own L3 (Layer 3) blockchains within the Arbitrum ecosystem.
L3 (Layer 3 network) refers to the block network built on L2 Arbitrum, which is the L2 of Arbitrum. Rollups technology is used in the L2 network Arbitrum to batch transaction data onto the L1 Ethereum mainnet. L3, built on Arbitrum, will use a similar Rollup to send its on-chain transaction data to Arbitrum in batches and then Rollup into Ethereum, which will allow for increased transaction processing at a relatively low cost.
TVL jumped to fourth, what are the applications of the Arbitrum ecosystem?
With ARB tokens as an on-chain incentive, it will drive more users to influx and funds into the Arbitrum ecosystem, and projects in its ecosystem will also see the growth of related KPI data such as users, protocol TVL and revenue.
On March 17, a core member of the Arbitrum community @Hunter users posted in the Discord community, "Do you think the Odyssey will not return?" Think again", many users interpret this as the second round of Arbitrum's Odyssey eco-incentive activity is coming.
According to DeFiLlama data, on March 21, Arbitrum on-chain TVL was $1.81 billion, ranking fourth in the entire public chain board, second only to BSC, with 243 on-chain applications.
In addition to mainstream DeFi protocol applications such as Uniswap, Sushiswap, Curve, and Aave, what other applications does Arbitrum have?
1. Official Arbitrum Bridge
Arbitrum Bridge is the official cross-chain bridge on the Arbitrum chain, allowing users to transfer assets from the L1 Ethereum mainnet to the Arbitrum One and Arbitrum Nova networks on L2. It also supports users to extract assets from L2 to the L1 mainnet.
Arbitrum Bridge
It should be noted that when using Arbitrum Bridge to recharge assets from L1 to L2, it takes about 10 minutes or an hour or so to arrive; However, when withdrawing assets from L2 to L1, there is a waiting period of at least 7 days, and you need to manually collect them to the L1 address account.
However, today, there are third-party cross-chain bridges that allow users to withdraw assets from L2 to L1 instantly, without waiting periods, such as the Hop Protocol.
2. Decentralized perpetual contract exchange GMX (GMX)
GMX is a decentralized derivatives exchange built on the Arbitrum chain, which supports spot and perpetual contract trading, and its core business is still perpetual contract trading. At present, GMX has been cross-chain to Avalanche, users only need to connect to the wallet and do not need to register an account to trade. According to the official website, as of March 21, the historical trading volume on the GMX platform has exceeded 113.3 billion US dollars, with more than 250,000 users and 160 million US dollars.
Trading users can start trading after depositing USDC, ETH or WBTC as margin in GMX, GMX supports up to 30 times leverage trading on assets such as BTC and ETH, transactions are traded in real time according to oracle prices, and profits can be withdrawn in real time.
At present, there are two main modes of decentralized contract trading applications in the market, one is the order book model represented by dYdX, which uses the funding rate mechanism to balance the positions of long and short positions, which is similar to the centralized contract exchange (CEX) model; The second is the AMM (Automated Market Maker) model represented by the Perptive (PERP) application, often referred to as the "contract version of Uniswap".
However, GMX is different from the above two models, GMX's counterparty is the GLP pool, which is a pool of funds composed of a basket of crypto assets (such as BTC\ETH\USDC\USDT\DAI\FRAX\LINK\UNI) for users to perform exchange and leverage transactions, and the assets in the GLP pool are deposited by liquidity providers (LPs) on the GMX platform.
In addition, GLP is also a special token in GMX, also known as liquidity token, which is a collective representative of a basket of crypto assets (similar to an index fund), and the price changes as the assets in the asset pool move. When users provide liquidity to GMX, they can directly purchase GLP with single assets such as BTC, ETH, USDC, etc. on the platform and pledge, instead of providing two tokens in a 1:1 ratio, such as ETH/USDC; However, when the user withdraws liquidity, he only needs to exchange GLP for the desired asset. Since liquidity is provided by providing a single asset, there is no need to consider the impermanent loss common to LPs.
GLP prices and data
As of March 20, the value of crypto assets deposited in Aribtrum's GLP pool was approximately $480 million.
Since GLP holders provide liquidity for GMX leveraged trades, i.e. the counterparties to all trades are GLP, i.e. both long and short counterparties are GLP pools. Therefore, there is still a zero-sum game between GLP and contract traders - when leveraged traders lose, the margin is directly allocated to GLP, the price of GLP will rise, and GLP holders will profit; When a leveraged trader makes a profit, the trader earns a profit also from GLP, the price of GLP will fall, and GLP holders will lose money. In addition to this, holding GLP also earns a share of the GMX platform's transaction fees.
GMX's platform governance token name is also GMX, with a total supply of about 13.25 million, and today, it is tentatively quoted at $82, with a market capitalization of $700 million.
3, native decentralized trading platform Camelot (GRAIL)
Camelot is a native DEX on Arbitrum, which supports instant exchange and trading of native assets within its ecosystem. Currently, Camelot applies TVL to $99.84 million.
Camelot bills itself as an innovative and highly flexible DEX that uses the Uniswap V2+Curve dual AMM mechanism to support low-slippage trading volatility and stability token trading pairs.
On the basis of these functions, Camelot has added the Launchpad function and supports dynamic directional transaction fees to support project parties to set different fees for each capital pool, and can also define fees according to the different trading directions. For example, if a newly launched project may need to limit selling pressure, the selling fee can be set higher than buying. Take Camelot's own platform coin, GRAIL, for example, the commission rate for buying with USDC is 0.3%, and the fee rate for selling is 1%.
In addition, Camelot combines LP assets with NFTs, allowing project parties to set specific incentives according to their needs.
At present, the liquidity incentive policy on DEX mostly uses the user to invest LP assets into the rewarded pool, and the amount of reward received depends on the share of the total pool. However, this model has a disadvantage, all LP rewards in the pool are the same, regardless of the length of time the LP is provided, which makes it impossible to distinguish between which income-chasing capital and long-term loyal users of the application, because they have different impact on the sustainability of the application, and the capital that is trended by the income will withdraw liquidity at any time as the price of the reward token falls or the income decreases. In addition, once the user provides liquidity, the LP asset is occupied and cannot generate other income. Camelot hopes to solve these problems with the combination of LP and NFT.
On Camelot, users can create LP tokens as staking positions spNFTs when providing LPs. Compared with ordinary LP liquidity certificates, spNFT is an interest-bearing position certificate, in addition to regular transaction fees, it can also obtain other benefits rewarded by other project parties, such as locking LPs to increase income.
When providing liquidity on the Camelot platform, the user can choose "Position" and "LP only". If the former (Position) is selected, the user will automatically create a pledge position for LP while providing liquidity, select the lock time of liquidity, and the income is different for different locking time, at this time, the user does not obtain LP tokens after providing liquidity, but spNFT represents the staking position in Camelot; If the latter (LP only) is chosen, liquidity providers can only receive a share of the pool's trading fees.
In addition, the project party can set additional incentives through the incentive pool Nitro Pools, such as users add liquidity to the GMX/USDC pool and create LPs as staking positions spNFT, then the project party wants to reward long-term supporters of liquidity, then he can set another reward in Nitro Pools, and users can get additional income after staking their spNFT holdings to the Nitro pool.
In general, Nitro Pools hopes to reward users based on the length of time they provide LPs, and hopes that LP assets can be more efficient in their capital use.
Camelot's native token is GRAIL, with a maximum issuance of $100,000 and a tentative report of $4,087, with a market cap of $39.92 million.
4. Radiant Capital (RNDT), a full-chain lending platform
Radiant Capital (abbreviated as Radiant) is a full-chain liquidity lending platform built by LayerZero cross-chain technology, which means that you can deposit assets on one chain and borrow on another chain at the same time. For example, users can deposit collateral USDT on Arbitrum, lend ETH on Polygon or lend wBTC on the BNB Chain.
However, in the case of Arbitrum's single chain, Radiant is an overcollateralized lending platform that allows users to deposit or pledge crypto assets. Radiant aims to be the first full-chain currency marketplace where users can deposit any major asset on any major chain and borrow a variety of supported assets across multiple chains. As of March 21, Radiant platform TVL was $80.19 million.
Currently, Radiant only supports users to deposit or lend DAI, USDC, USDT, BTC, ETH, etc. on the Arbitrum chain. Radiant is also very simple to use, you can choose DAI, USDC, USDT, ETH and WBTC as collateral to deposit into the protocol, and then you can get a new amount of liquidity to use without selling tokens, thus improving the efficiency of your funds.
After the deposit is successful, you can enter the borrowing page to borrow, the system will automatically calculate your borrowing amount according to your deposit amount, after selecting the currency you want to lend, you only need to enter the borrowing amount and the public chain to lend it.
On March 19, Radiant launched the V2 version, which will support more assets, will be expanded to multiple new chains, and will be deployed cross-chain on BNB Chain in the near future.
Radiant's platform token is RDNT, with a total issuance of 1 billion, and is now quoted at $0.46.
5, decentralized "Nintendo" Treasure (MAGIC)
Treasure DAO (Treasure for short) is a native metaverse gaming ecosystem on Arbitrum, which aims to bring games and players together through its eco-token MAGIC.
Treasure started as an NFT project on the Loot ecosystem, and later became a decentralized gaming ecosystem that shared resources, communities and infrastructure. The platform integrates NFT, DeFi and GameFi applications, aiming to support NFT and metaverse projects to build their own ecosystems on the platform and achieve integration between projects.
At present, the main products in the Treasure ecosystem include resource token MAGIC, NFT trading market Trove, DEX trading platform Magicswap, original and cooperative chain games.
- MAGIC is the native token of Treasure DAO, first issued in September 2021, with a total supply of 500 million, tentatively reported at $1.81. MAGIC is the core asset of the Treasure ecosystem, which can be used to purchase NFTs, play the role of a payment medium, and generate new resources by consuming MAGIC to participate in the game or upgrade the characters in the forging game, generating new resources, and so on. MAGIC is a limited resource in the Treasure ecosystem, the number of outputs will be less and less, participants have to think of scarce MAGIC, the more the number also means the more energy you have in the Treasure ecosystem. Treasure is also building various stories around the acquisition of MAGIC.
- Trove, an NFT trading platform in the Treasure ecosystem, supports users to collect and purchase NFTs in the Treasure ecosystem, launched in November 2021, with the goal of becoming an Arbitrum ecological NFT trading platform that benchmarks OpenSea. At present, the NFTs launched on Trove's platform are priced in ETH and MAGIC, and most of the NFTs on the Trove market are NFTs in the Treasure ecosystem. However, according to the official plan, Trove will allow the listing of unauthorized collectibles in the future, and also plans to open a multi-chain ecology in the future.
- Magicswap is a DEX in the Treasure ecosystem, currently, supports MAGIC/Gfly and MAGIC/ELM transactions, the latter two make it a game token within the ecosystem.
Chain games include original games such as Bridgeworld, The Beacon and community games Smolverse.
- Bridgeworld is an original game of the Treasure ecosystem, a competitive strategy game for business strategy, where users can mine and harvest MAGIC tokens. The game, which incorporates multiple DeFi concepts and aims to build a more open metaverse story connected by resources and narratives, is at the heart of the Treasure metaverse. In this game, Legion is a heroic character in the game and an important NFT asset, which can be purchased on the NFT market or minted with MAGIC, players enter the game as a legion, players can arrange the legion to do tasks to obtain the "Treasure NFT" of the reward attribute, players can use treasure NFT to mine MAGIC tokens, or generate new resources or mining props, etc., to accelerate the production speed of MAGIC. In addition, BridgeWorld also supports players to build new stories or games for in-game NFTs, as well as integrating other project NFTs into the game.
- The Beacon is a pixel wind action role-playing ((RPG)) game launched by Treasure, players can get character NFTs for free or paid for, and then enter the dungeon adventure or enter the tavern to answer questions, both types of actions can get dropped object NFTs, paid to get the NFT obtained after the character adventure can be sold on the NFT exchange market for profit, the game was a hit after its launch.
- Smolverse originally originated as an NFT project promoted by the Treasure community, and currently integrates three main Smol series NFTs, including Smol Bodies (pixel-style body pictures, limbs can also become larger), Smol Pets (pixel-style pets, Smols' companions) and Smol Brains (pixel pictures of monkey heads, the head can grow larger with IQ). On March 3, Treasure announced the launch of game studio Darkbright, responsible for the development of games for the Smolverse NFT project within the ecosystem.
From this point of view, Treasure has become an incubation place for NFT or game new projects, in addition to providing a series of infrastructure such as NFT trading platforms and DEXs, it has also formed a complete construction chain of projects from birth, operation to subsequent stories. Treasure has clearly become a decentralized "Nintendo", NFT or game project incubation and release platform.
6. Gains network (GNS), a decentralized derivatives trading platform
Gains Network is a decentralized derivatives trading platform built on Polygon and Aribtrum, providing leveraged trading in foreign exchange, tokenized stocks, indices, etc. in addition to cryptocurrencies.
The decentralized leveraged trading platform launched gTrade is the core product of the Gains Network. According to Dune data, the gTrade platform has generated $32.27 billion in trading volume and $23.23 million in transaction fees.
The gTrade platform offers traders up to 150x leverage on crypto assets, 100x leverage on stocks, and 1000x leverage on forex trading.
Regardless of the trading pair, on the gTrade platform, the leveraged counterparty is provided by the only DAI vault to provide liquidity, and the user in GMX's GLP, the DAI vault acts as the counterparty of the leveraged trader on the platform, the user deposits the DAI can open an airdrop or long position, the user can also deposit DAI in the DAI vault as an LP, earning trading fees at the same time, need to bear the profit and loss of the opponent as a leveraged trader.
In addition, gTrade has a minimum position size of 1500 DAI in Polygon and 7500 DAI for Arbitrum, which is calculated by multiplying the user's collateral by the user's leverage. This means that if the user wants to use 10DAI position size on Polygon, he should use 150 times leverage (10*150=1500), of course, users can use lower leverage by using higher collateral, such as 100DAI collateral and 15x leverage (100*15=1500).
The Gains Network platform token is GNS with a total issuance of 30.44 million and is now quoted at $7.95.