BeL2 release Bitcoin liquidity in Arbitrum and Optimism ecosystems
The expansion issue of Ethereum has always been an important challenge in the development of blockchain. Layer 2 solutions have emerged, with Arbitrum and Optimism as leaders, making significant progress over the past few years.. This article will provide an in-depth analysis of the ecosystems and Layer 2 network construction of Arbitrum and Optimism, as well as how to release the liquidity of Bitcoin and promote the development of their respective ecosystems by accessing BeL2.
Ecosystem comparison
Although both Arbitrum and Optimism are based on Optimistic Rollup technology, they present different characteristics in terms of ecological development.
Arbitrum Ecosystem
Overall overview : Arbitrum is regarded as one of the earliest and most ecologically mature Layer 2 networks. Its ecosystem covers DeFi, NFT, GameFi and other fields, and has attracted many developers and users. As of August 31, 2024, Arbitrum One’s total locked value (TVL) exceeded US$14.75 billion, with more than 36 million independent addresses and more than 2,000 ecological projects.
DeFi field : Arbitrum’s DeFi ecosystem is very active, including decentralized exchanges (DEX), lending platforms and perpetual contract exchanges.
DEX : In addition to well-known projects on Ethereum such as Uniswap, Sushiswap and Curve, native DEXs such as Camelot are also rising rapidly. Camelot has features such as customizable transaction fees, combining LP and NFT, and providing incentives for project parties..
Lending : Radiant is the leading lending protocol on Arbitrum and its TVL dominates. Radiant encourages users to borrow and recycle loans by providing RDNT rewards. Aave V3 is another important competitor focusing on cross-chain lending.
Perpetual contracts : GMX is one of the most successful projects on Arbitrum. It provides ETH, BTC and other perpetual contract transactions with up to 30 times leverage on a decentralized platform through a dual-token model..
NFT field : Arbitrum’s NFT ecosystem is also constantly developing, including NFT markets, NFT projects and tools, etc.. Well-known NFT projects such as OpenSea, NFTScan and Azuki have entered the Arbitrum ecosystem.
GameFi field : Arbitrum has also developed in the GameFi field. Treasure DAO is its representative project and aims to become the “Nintendo of Web3”. Arbitrum Nova chain is specially designed for gaming applications.
Other applications : There are also social platforms, gambling applications and authentication platforms on Arbitrum.. Arbitrum’s Odyssey campaign attracted many users and established Galxe as a leading provider of authentication services.
Optimism Ecosystem
Overall overview : As another important Layer 2 solution, Optimism’s ecosystem is also developing rapidly. Optimism emphasizes compatibility with Ethereum and is committed to building a modular blockchain ecosystem.
DeFi field : Optimism’s DeFi ecosystem is also relatively complete, including decentralized exchanges and lending platforms. Velodrome is the largest DEX on Optimism, and Sonne Finance is Optimism’s native lending platform..
GameFi field : Compared with Arbitrum, Optimism’s development in the GameFi field is relatively weak, but its OP Craft project is exploring a new paradigm for full-chain games..
Other applications : The Optimism ecosystem is also constantly expanding, attracting more and more projects to join.
Ecological characteristics, advantages and disadvantages
Technical features
Arbitrum : Using a multi-round interactive fraud proof mechanism to improve security and efficiency. Its Nitro upgrade significantly increases network speeds and reduces transaction costs. Arbitrum also launched AnyTrust technology for building Arbitrum Nova, designed for high transaction volume applications.
Optimism : Using a single-round fraud proof mechanism, although it is faster, the gas fee may be higher. Optimism emphasizes EVM equivalence and is committed to building a modular OP Stack.
Performance :
Arbitrum : Outperforms in transaction throughput, transaction fees and finality. Its Nitro upgrade increases L2 execution speed by 20-50 times and further reduces transaction fees.
Optimism : Although it also has advantages in terms of speed and cost, it may not be as good as Arbitrum in some aspects.
Security :
Arbitrum : Ensures the security and effectiveness of the network through multiple rounds of fraud proof and AnyTrust technology. Arbitrum One basically inherits the Ethereum mainnet in terms of security.
Optimism : Through single-round fraud proof and modular OP Stack, the security and scalability of the network are ensured.
Community governance :
Arbitrum : DAO governance through ARB tokens, allowing holders to participate in governance and voting.
Optimism : DAO governance is also carried out through OP tokens, and the community is encouraged to participate in ecological development..
Token economic model :
Arbitrum : The total supply of ARB tokens is 10 billion, with a maximum annual inflation of 2%.
Optimism : OP tokens also serve as governance tools, and the total supply has an annual inflation rate of 2%..
Layer 2 network construction
Arbitrum and Optimism both use Optimistic Rollup technology in Layer 2 network construction, but the specific implementation is different.
Arbitrum’s Layer 2 network architecture
Core technology : Arbitrum is based on Optimistic Rollup technology and achieves capacity expansion by executing transactions under the Ethereum chain and submitting the results to the Ethereum main network..
Multi-round interactive fraud proof : One of Arbitrum’s core technologies is its multi-round interactive fraud proof mechanism, which divides fraud proof into multiple rounds of steps. You only need to prove that the orderer has an abnormality when executing a certain instruction to prove the ordering. do evil, thus saving costs.
Arbitrum Nitro : Arbitrum One successfully upgraded to the Nitro version, enabling higher throughput, faster finality, and more efficient dispute resolution by supporting Arbitrum’s interactive fraud proof on WASM-compiled Nitro code..
Arbitrum Nova : L2 built based on AnyTrust technology, which reduces on-chain interaction costs by sacrificing part of the decentralization, and is more suitable for high-frequency trading needs such as games.. AnyTrust introduces a new security model by the Data Availability Committee (DAC), which achieves ultra-low operating fees and faster withdrawals while maintaining Ethereum mainnet-level security.
Arbitrum Orbit : Allows you to build your own private chain without permission, with the ability to customize throughput, privacy, Gas tokens, governance, etc., and is more suitable for products with highly customized needs.
Optimism’s Layer 2 network architecture
Core technology : Optimism is also based on Optimistic Rollup technology, which processes transactions on the Optimism chain and only records the final results on Ethereum, significantly reducing transaction fees..
Single-round fraud proof : Optimism uses a single-round fraud proof mechanism. Although it is faster, the gas cost may be higher..
OP Stack : Optimism launches OP Stack, a modular open source blueprint that allows developers to build their own L2 blockchain on Ethereum using Optimistic Rollup. OP Stack includes components such as mainnet, contracts, services and tools.
Superchain : The goal of Optimism is to integrate all L2 based on OP Stack into a super chain, share ordering, certification and cross-chain infrastructure, and promote seamless communication between various networks..
Technical implementation differences
Rollup type : Both use Optimistic Rollup, but differ in the fraud proof mechanism.
Fraud proof mechanism : Arbitrum uses multiple rounds of interactive fraud proof, Optimism uses a single round of fraud proof.
Virtual machine design : Optimism uses EVM, and Arbitrum uses its own Arbitrum Virtual Machine (AVM), which is compatible with all EVM programming languages.
Transaction processing capabilities : Arbitrum’s transaction processing capabilities have been greatly improved after the Nitro upgrade, while Optimism achieves scalability through OP Stack.
Gas charges : Arbitrum’s Gas charges are generally lower than Optimism’s, but actual charges will vary based on network congestion..
Connect to the BeL2 chain to realize cross-chain operations and release Bitcoin liquidity
The core concept of BeL2 is to harness the value of Bitcoin and apply it to other blockchain ecosystems without actually transferring Bitcoin assets . It verifies Bitcoin transactions through advanced cryptography techniques, specifically zero-knowledge proofs (ZKP) , and uses these proofs in smart contracts on other blockchain networks.
Technical principles of BeL2
Bitcoin Locked : Bitcoins are held securely locked by their owners.
Zero-knowledge proof verification : BeL2 uses zero-knowledge proofs to verify Bitcoin transactions without revealing transaction details.
Smart contract applications : Verified proofs of Bitcoin transactions can be used in smart contracts on other blockchain networks.
Cross-chain transactions : BeL2 facilitates the flow of information and value between different blockchain networks through its arbitration network.
BeL2 security
Bitcoin security foundation : BeL2’s security is based on Bitcoin’s powerful proof-of-work consensus and decentralized network.
Zero-knowledge proof : Zero-knowledge proof is used to verify transactions and maintain privacy, ensuring the authenticity of transactions without revealing sensitive information.
Arbitration Network : The Arbitration Network provides an additional layer of security and dispute resolution to ensure the validity and fairness of transactions.
BeL2 Advantages
Utilization of Bitcoin Value : BeL2 allows the value of Bitcoin to be safely leveraged into other blockchain ecosystems without putting actual Bitcoin assets at risk.
Decentralized Stablecoins : BeL2 enables the creation and management of stablecoins backed by Bitcoin. These stablecoins provide the stability needed for daily transactions while retaining the innovative properties of cryptocurrencies.
Cross-chain interoperability : BeL2’s goal is to build a global financial system based on Bitcoin and promote interoperability between Bitcoin and other blockchains. Through BeL2, assets on different blockchains can interact with users more conveniently.
Smart Contracts : BeL2 leverages Bitcoin’s programmability to implement smart contracts, opening up possibilities for new financial products and services.
The impact of releasing Bitcoin liquidity on the DeFi ecosystem through BeL2
Increase DeFi total locked value (TVL) : The issuance of stablecoins linked to Bitcoin through BeL2 can introduce the huge market value of Bitcoin into the DeFi ecosystem of Arbitrum and Optimism, significantly increasing TVL.
Enriching DeFi application scenarios : Bitcoin stablecoins can be used as collateral, transaction media and value storage tools to enrich DeFi application scenarios and promote the development of lending, trading and derivatives.
Promote the flow of cross-chain assets : The cross-chain interoperability provided by BeL2 can enable the free flow of Bitcoin assets between different Layer 2 networks, improve capital efficiency, and promote the collaborative development of ecosystems.
Improve the stability of the DeFi ecosystem : Stablecoins backed by Bitcoin can provide a more stable foundation for the DeFi ecosystem and reduce the impact of market fluctuations.
Development prospects
The future prospects of Arbitrum and Optimism docking BeL2
Arbitrum : As a leader in Layer 2, Arbitrum’s integration with BeL2 will further consolidate its advantages in the DeFi and GameFi fields and expand the scale of its ecosystem.
Optimism : Optimism is a modular blockchain ecosystem built through OP Stack. Its integration with BeL2 can improve its cross-chain interoperability and attract more Bitcoin holders into its ecosystem.
Common development : By accessing BeL2, Arbitrum and Optimism can jointly create a more open, interconnected and efficient blockchain ecosystem and jointly promote the development of Layer 2 technology.
Opportunities and challenges faced
opportunity :
Unleashing the potential of Bitcoin : BeL2 provides new application scenarios for Bitcoin, making it not only a value storage tool, but also participating in DeFi and other applications.
Expanding the Layer 2 ecosystem : By introducing the liquidity of Bitcoin, the ecosystem scale of Arbitrum and Optimism can be further expanded and attract more users and developers.
Promote cross-chain development : BeL2’s cross-chain interoperability will promote collaborative development between different blockchain networks.
challenge :
Technical complexity : The technical implementation of BeL2 is relatively complex and needs to overcome security and performance challenges.
User acceptance : It will take time for users to adapt to the new model of using Bitcoin stablecoins and cross-chain transactions.
Competitive pressure : Competition in the Layer 2 track is fierce, and Arbitrum and Optimism need to continue to innovate to stay ahead.
Regulatory uncertainty : The regulatory environment for cryptocurrencies is still evolving, which may have an impact on BeL2 and Layer 2 development.
Summarize
As the leaders of Ethereum Layer 2, Arbitrum and Optimism have made remarkable achievements in ecosystem and network construction. By accessing BeL2, the huge liquidity of Bitcoin can be released and bring new development opportunities to the DeFi ecosystem. Despite the challenges, as technology advances and the market matures, Arbitrum and Optimism are expected to continue to lead the development of Layer 2 in the future and build a more open, interconnected and efficient blockchain ecosystem.
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