XAI is rising strongly, what other L3 ace projects does Arbitrum Orbit have?

Original title: “The Year of Arbitrum Orbit”

Original author: Francesco

Original compilation: Luccy, BlockBeats

Editor’s note: As competition for Ethereum Layer 2 solutions intensifies, Arbitrum Orbit is making a name for itself in driving the ecosystem. Crypto researcher Francesco dives into Arbitrum’s technological innovations, developer licensing model, and the uniqueness of the Orbit chain, citing projects that have been built on top of Orbit. Francesco noted that the Arbitrum tech stack is poised to unleash its potential to breathe new life into the ecosystem in 2024 as more projects choose to build on top of its stack, which BlockBeats compiled as follows:

Layer 2 have cemented their role as the most successful implementation in the Ethereum scaling roadmap.

Among them, Arbitrum and optimism have been attracting projects and talent to compete fiercely on top of L2 – often referred to as the Battle of L2.

At first, it was a war of protocols and users to build critical infrastructure for L2 and collect the initial critical numbers.

Now that they are thriving, the next step in this fictional war is who will attract more projects to build on top of their stacks.

To do this, they chose a different approach.

Arbitrum focuses more time and energy on refining its technology stack and Decentralization governance, while optimism takes a more streamlined approach that can be summed up as an “emphasis on growth” – it’s all about trade-offs.

Eventually, as more and more protocols adopted the OP Stack, these different trade-offs became apparent, leading many to believe that Arbitrum was losing the game.

However, this is not a race, but a marathon.

The Year of Orbit

If we analyze the data, Arbitrum remains the largest L2 for TVL at over $2.5 billion and one of the most complex and composable Decentralized Finance ecosystems, with more than 500 protocols.

Orbit is part of Arbitrum’s expansion plan, which will see its tech stack being leveraged by other projects built on top of it.

As part of these plans, there are already more than 50 Arbitrum Orbit chains in development, with one of the Arbitrum founders speculating that there will be around 150 by the end of the year.

What is Arbitrum Orbit?

Orbit is the Arbitrum stack that allows anyone to launch their chain on Arbitrum One or Nova without permission. It is equivalent to the OP Bedrock stack, where the protocol can build its own chain.

Arbitrum Orbit allows any developer to easily and permissionlessly launch their own Arbitrum Chain-based L3 ecosystem.

What can you build on Orbit?

When building on Orbit, projects can decide whether they want to build L2 or L3 on top of Orbit, and whether they want to choose Arbitrum One or Nova.

Based on the necessary trade-offs between decentralization and performance, on Arbitrum Orbit you can decide whether to build:

• Arbitrum Rollup
• Arbitrum Discretionary Trust
• L3 for specific use cases

By creating the Orbit Chain, projects can customize their throughput, privacy, gas Token, governance, and more.

Why should a project be built on Orbit?

• Gas Price Reliability: Dedicated throughput and traffic isolation
• Arbitrum Stylus: Benefit from EVM compatibility
• Referee Nitro: Upgrade with Referee Nitro code
• Arbitrum’s independent roadmap
• Customizable permissions: choose who can read and deploy data and Smart Contract (no permission/permission)
• Choose a gas Token: Whether it’s ETH, ARB, or your Token.
• Account withdrawal/Transaction Fee subsidy
• Customizable protocol settlement/execution/governance
• Low cost to launch prototypes

Differences with the Optimism model

In contrast to the OP model, Arbitrum chooses a development licensing model.

When building a new Orbit chain, projects are fully licensed to adapt the Arbitrum codebase to their needs. These licenses are:

• Perpetual—No one can take the software license away from you
• Recursive – The Orbit chain itself can host other chains governed by the same license

While developers can always deploy any L3 without permission, launching a new L2 chain directly on Ethereum using the Orbit stack requires custom licenses from Offchain Labs or approval from the Arbitrum DAO, which may grant these licenses at its sole discretion.

Almost like its trademark, Arbitrum prioritizes slower processes, ensuring checks and balances are in place to ensure consistency between Arbitrum and the Orbit-hosted L2 on it, while optimism has always tended to take a faster approach to pitching its tech stack.

What’s so special about Orbit?

One of the differences between Arbitrum Orbit and other L2 competitors is “elastic block time”, which means that Orbit elastically produces blocks based on demand.

The Orbit chain can produce up to 4 blocks per second if a large number of transactions come in, but if the chain continues to run without transactions, there will be no blocks.

Why is this important?

The cost of producing Empty Blocks is high, especially if they choose Ethereum.

A new chain that has just been launched can have serious problems with transactions, especially initially.

Orbit’s resiliency Block time allows them to save money on L1 BlockSettlement because there are no empty Block and no money wasted.

Cumulatively, elastic block times will improve the capital efficiency of the Arbitrum Orbit network, and here is an example compared to the OP stack chain, which produced 7.8 million blocks, even though it only had 577, 000 transactions.

In addition, Orbit allows projects to build an “Anytrust” chain that can leverage a custom data availability solution from the Commission (DAC). This, in turn, enables “ultra-low transactions of less than a penny without compromising security and trust minimization”.

Orbit chains also benefit from Arbitrum Stylus, which enables them to write Smart Contracts in the most popular languages such as “Rust, C, and C++”) while maintaining full EVM compatibility.

Has anyone been developing on Orbit?

There are already several projects that use Orbit to build L3:

@XAI_GAMES

@Cometh

@SyndrHQ

@polychainmon

@meliorafnd

@SankoGameCorp

@oursong

@DeriProtocol

@HookProtocol

@Superpositionso

@hytopiagg

Most of these projects revolve around games, others revolve around Decentralized Finance, music, new ways to stream incentives, and more.

With more Orbit chains on the horizon, the Arbitrum technology stack will finally show potential at the infrastructure layer by 2024.

It’s worth remembering that Arbitrum is a stage 1 rollup, while optimism is still stage 0 because they lack proof of failure in the field.

The benefits of the thriving Orbit Chain network will also extend to ARB.

While most L3s may use their own native Token for gas, ARB Token can also benefit from the Orbit chain using it as a supply pool for gas Token.

Orbit has all the ingredients for success:

• Flexible tech stack: All development comes from the Nitro codebase while remaining completely independent
• Network effects of Arbitrum
• A strong treasury that stimulates growth

The Arbitrum DAO runs several grant programs for the ecosystem, so it’s not far-fetched to foresee them using some funds to stimulate Orbit’s builders, such as gas fee subsidies, etc.

At the same time, the Orbit Chain will raise new questions about governance, which one of the co-founders of Arbitrum addresses in his new research article.

Are you ready to launch a series of new chains on Orbit?

Admittedly, Arbitrum has lagged behind in tech stack adoption compared to optimism, and will we see changes in 2024 with the launch of the new Orbit chain?

Link to original article