Overview of Arbitrum Orbit Chain

Arbitrum is the leading project in the field of Rollup and Modular Blockchain. Orbit Chain is a plan to expand the ecosystem, while demonstrating Arbitrum's ambition.

Arbitrum Orbit chain overview

Development context

Before learning about Arbitrum Orbit chain, we will learn about the context surrounding the development and business licenses related to Arbitrum Nitro.

Abitrum has two main versions:

·      Arbitrum Classic: This first release runs from August 2021 to August 2022. This is the first phase of Arbitrum's development, the project focuses on developing the core functionality of Arbitrum One, a general optimistic Rollup, so many aspects are still not optimized.

·      Arbitrum Nitro: A comprehensive upgrade to Arbitrum Classic, Nitro has introduced a new architecture that increases throughput and reduces fees. In August 2022, Arbitrum One migrated to the Nitro codebase. Currently, all L2 and L3 in the Arbitrum ecosystem, including the Arbitrum Orbit chain, are developed on the Arbitrum Nitro codebase.

Business license (license) of Arbitrum Nitro

Similar to Uniswap, Arbitrum Nitro uses a business license (BSL, Business Source License) to balance the need for open source development with protecting Arbitrum's business interests.

Specifically, the BSL that Arbitrum uses allows users to view, modify and distribute the codebase, but with certain usage restrictions determined by the publisher, in this case Offchain Labs, the development team behind after Arbitrum Nitro.

Currently, there are 2 ways to take advantage of the Nitro codebase:

·      Permissionless deployment for Layer 3 built on Arbitrum One or Arbitrum Nova.

·      For teams that want to deploy Nitro directly on Ethereum as Layer 2 or Optimium, they must commit to contributing 10% of revenue to the Arbitrum DAO.

The Arbitrum Orbit chain is powered by the core technology Arbitrum Nitro. It is like a Rollup SDK that allows developers to easily launch their own custom blockchain instances within the Arbitrum ecosystem.

Developers have 2 options as follows:

·      Orbit chain Layer 2: These Arbitrum Orbit chains inherit security directly from Ethereum and higher scalability for transactions. However, there will be certain constraints from Nitro's business license.

·      Orbit chain Layer 3: Orbit Chains are built on L2s. Developers are free to use Nitro if they build on Arbitrum One or Arbitrum Nova. In cases where developers choose to build Orbit Chain Layer 3 on top of other layer 2s, they are subject to the same constraints as above.

Similar to other Rollup SDKs, Arbitrum Orbit chain offers customization in several aspects:

·      Custom Gas Token: the developer has control over choosing the ERC20 token as the gas fee. This allows developers to design custom economies for their own chains.

·      Custom Data Availability Layer: Allows you to choose project solutions appropriate to your needs and development orientation. Options include; Ethereum, AnyTrust (Arbitrum), Avail, Celestia and Eigen DA.

·      Self Governance: Arbitrum Orbit chains have the right to maintain individual autonomy without having to follow common governance constraints. Arbitrum Orbit chains can also deploy technology upgrades, such as new versions of ArbOS, whenever they are ready.

In addition, Arbitrum Orbit chain also benefits from Nitro's future upgrades, including performance optimization, BOLD (permissionless fraud proof system), WASM (Stylus) execution environment.

Arbitrum development status

Arbitrum has a rich and diverse ecosystem with more than 500 active protocols on Arbitrum One and Nova, mainly focused on the DeFi sector. Arbitrum's Total TVL is at $17.8B, accounting for nearly 50% of the total market share.

In addition, Arbitrum One is always one of the chains with the highest level of activity in the market, often in the top 5 Layer 2 with the highest level of activity according to L2beat data.

In the technical aspect, Arbitrum is also one of the leading projects, they are the few Optimistic Rollup projects with a proof system operating on Mainnet.

Arbitrum also pioneered a WASM VM implementation on the execution layer, which it called Stylus. Deploying Stylus significantly reduces the cost of smart contract development and enables developers to write smart contracts in languages suitable for their applications.

Currently, there are about 10 Orbit Chains operating on the mainnet including Arbitrum One and Nova. On average, Orbit Chains are performing 4 - 5 times as many transactions as Ethereum.

Among the currently active Orbit chains, Degen Chain is the chain with an average level of activity ranging from 20 - 30 tps. Degen Chain is a Layer 3 built on the base, the project uses off-chain DA (Anytrust).

Arbitrum Orbit chain ecosystem

According to Arbitrum co-founder Steven Goldfeder, more than 34 groups have publicly built the Orbit chain. These projects cover a variety of sectors, including DeFi, Gaming, Derivatives, and NFTs.

Some notable projects include:

Parallel

Parallel is a Layer 2 scaling solution, the project's ambition is to consolidate liquidity from many different chains. It leverages Arbitrum Orbit, Conduit and Socket protocols for cross-chain interactions to achieve this. The project also integrates Parallel with Pimlico which will enable Account Abstraction (ERC-4337) features.

Rari Chain

Rari Chain is an extension of the Rarible NFT marketplace. Rari Chain is an L3 EVM equivalent (EVM-equivalent) built on Arbitrum One using AnyTrust (offchain DA) to maintain low transaction fees. Owning its own infrastructure gives Rarible more autonomy in adding new features to the platform. Rari Chain will be governed by Rari DAO and use the same native token, RARI.

XAI

XAI is similar to Rarichain, an L3 EVM equivalent (EVM-equivalent) built on Arbitrum One that uses AnyTrust (offchain DA) to maintain low transaction fees. The difference is that XAI is a permissionless network.

Kinto

Kinto a Layer 2 scaling solution, the project takes a different approach that seeks to create a bridge between traditional financial institutions and the DeFi landscape. Kinto requires KYC to join the platform, some unique features offered include: insurance, AML monitoring,...

Syndr

Syndr is a derivatives exchange offering more than 100 markets for options, futures, and perpetual trading.

Syndr has implemented Orbit Chain Layer 3 to optimize latency for traders and reduce gas fees. Additionally, Syndr's EVM compatibility simplifies deposits and withdrawals for users.

summary

Arbitrum Orbit can be considered a powerful catalyst for the expansion of the Arbitrum ecosystem. With many customizations, Orbit Chain allows developers to create an isolated environment but still connect to EVM to launch large-scale applications.