ETH recently traded at USsand-eth uniswap v2 lp$3419.46, a daily increase or decrease of -1.53%;
Arbitrum was originally an academic project at Princeton University, established by the team Offchain Labs.xrp price chart kitcoArbitrum's proof mechanism is similar to Optimism above. The difference is mainly reflected in the difference in the data uploaded to the main chain. In the process of processing, when someone thinks that the second-level data is in dispute, they can pay a deposit and submit a proof. At this time, the contract will arbitrate it. In the Optimistic Rollup scheme, a complete contract will be simulated and executed on the main chain. Calling consumes high costs; in the Arbitrum Rollup scheme, firstly, through multiple rounds of interactions at the second layer, the dispute scope is reduced before being simulated on the main chain, the number of interactions is reduced, and the cost of dispute resolution on the chain is reduced. This is the biggest difference between the two schemes.
In May of this year, Arbitrum was opened to developers for the first time. On September 1st, the public beta was launched, and the whitelist mechanism was also offline. Similar to Optimism, Arbitrum currently has a clear limit on the upper limit of network processing capacity (80,000 arbgas/s), which roughly matches the current capacity of Ethereum L1, but Arbitrum also stated that as the system becomes stable, the speed limit will be gradually increased in the future. , And continue to improve performance.It is also this limitation. At present, the gas fee of Arbitrum is not very low, which is criticized by everyone, especially when a large number of transactions are influx and reach the upper limit of network capacity, then the cost of L2 will rise further, but compared to the main chain That said, the cost can still be reduced by dozens of times.Comparison of handling fees for Layer 2 transfer of ETH Data source: l2feesIt is undeniable that Arbitrum has fired the first shot of Layer 2 ecological development, but at present, Arbitrum is flooded with too many native dog projects, and everyone must pay attention to risks.Proof mechanism: fraud proof
Arbitrum advantages: Data is stored on the main chain, and it is easier to be compatible with EVM; the traditional Optimistic Rollup solution is optimized, which can further reduce costs.Arbitrum challenge: The exit period of the second layer is longer (7 days), and the overall security is slightly lower than that of the main chain and ZK solutions.Although the applications listed below are not comprehensive (there are many opportunities not included), let's take a look at the following examples.
Uniswap is the largest DEX (decentralized exchange) on Ethereum L1, and it is also the earliest adopter of Optimism L2 network. Uniswap was deployed on the Optimism network in July 2021. At the time of writing, the agreement has more than 32 million U.S. dollars of liquidity on the Optimism network, and has achieved a daily transaction volume of more than 10 million U.S. dollars in recent days.In addition to Optimism, Uniswap has also recently been deployed on the Arbitrum network. This deployment has enabled Uniswap to gain greater usage. In the past 4 days, the agreement has locked a total of 37 million U.S. dollars in value on the Arbitrum network, and generated more than 20 million U.S. dollars in transaction volume every day.SushiSwap is another important decentralized exchange and an early adopter of L2. SushiSwap has already occupied a considerable market share on the Polygon L2 network and is also deployed on other blockchains such as Fantom, Avalanche and Harmony. In addition, SushiSwap is also one of the first protocols deployed on Arbitrum.Since September 10th, the deployment of the SushiSwap agreement on Arbitrum has achieved great success. At the time of writing, its liquidity exceeded US$27 million, and its daily transaction volume exceeded US$24 million. In addition, Sushiswap's performance sometimes even outperforms its main competitor Uniswap, with transaction volume exceeding $125 million on certain days. See below:
Although the SushiSwap team stated that given their multi-chain strategy, they may postpone deployment to the Optimism network, but it seems likely that they will eventually deploy to the network.Curve is another decentralized exchange that quickly embraced L2. Curve has almost monopolized the exchange of similar assets on the Polygon and Fantom networks, and the agreement has recently been launched on the Arbitrum network. Currently, Curve provides 2 liquidity pools of similar assets and 1 V2 liquidity pool on Arbitrum (see the figure below). At the time of writing, these pools have a total of more than 131 million US dollars in liquidity, and have achieved more than 590 Ten thousand dollars in daily trading volume. At the same time, Curve is also a popular income farming place to minimize the risk of impermanent losses for liquidity providers.
Like SushiSwap, although it is unclear whether the Curve protocol is planned to be deployed on the Optimism network, considering the multi-chain tendency of the protocol, it seems likely that the protocol will eventually be deployed on Optimism.L2 native application #1: Synthetix (SNX)Because the transaction of Synthetix synthetic assets is computationally intensive, it is affected by the high gas fee of L1, which limits the growth of the Synthetix protocol in Ethereum L1. To this end, the Synthetix protocol began to work on unlocking its full capabilities on L2.Synthetix is an early supporter and adopter of Optimism, and other projects are also built based on the deployment of Synthetix on Optimism. For example, the Kwenta exchange on Optimism allows users to mint and trade Synthetix’s synthetic assets (Synths); The option agreement Lyra has also been launched on Optimism. Currently, the agreement provides 2 incentive pools with a lock-up value of more than 12 million U.S. dollars.
Dopex is another one that may benefit from the lower transaction fees and faster transaction confirmation brought by L2.Dopex is a decentralized options protocol supported by DeFi celebrities such as Tetranode and DeFiGod. Currently, the farm of the agreement has locked in a value of more than 75 million U.S. dollars. Although the option agreement is still in the testnet stage, it is planning to deploy its mainnet on Arbitrum.This means that the project can not only provide an investment method for investing in the emerging DeFi derivatives industry, but also increase exposure to the entire Arbitrum ecosystem.The decentralized perpetual contract exchange dYdX is another derivative protocol that releases its functions through L2.
dYdX has built its own L2 Rollup based on StarkWare's scalability engine StarkNet, and recently launched a liquid mining plan, which includes a retroactive airdrop of DYDX tokens worth $50,000 to some users. As a result, the attractiveness of the agreement began to increase, and its daily transaction volume increased by more than 10 times within 6 weeks, and it has remained above US$600 million.Perhaps the most direct way for investors to benefit from the success of a particular L2 network is to invest in the native tokens of that L2 network.
Although the design space of L2 native tokens is emerging, and we don't know whether all L2 networks will issue their own native tokens, L2 native tokens can provide a similar role to L1 native tokens in terms of providing exposure to specific networks. Although it is unclear whether all L2s will issue tokens, users have the opportunity to place themselves in a position to receive retroactive L2 native token rewards.Loopring is one of the most prominent application-specific Rollups in the Ethereum expansion ecosystem. It provides a complete set of products based on ZK-Rollup, including an AMM (Automated Market Maker) and order book exchange.
Investors can gain exposure to the agreement, which has generated more than $2.7 million in revenue in the past year in the form of LRC tokens. LRC tokens are used to govern the system and serve as the final collateral. Investors can purchase the token directly, or obtain the token reward by providing liquidity to the exchange. In addition, the top 25 traders with the trading volume on the designated trading pair (see the figure below) can also receive LRC token rewards (starting on September 9, 2021, lasting 28 days; settlement cycle is 7 days, A total of 4 cycles).Immutable X is a ZK-Rollup built on StarkWare.The agreement is optimized for NFT transactions and use in the emerging blockchain game field. Currently, it is using the "Play-to-Earn" model to motivate users to use the platform with IMX token rewards. . The IMX token plays several key roles in the operation of the network: users need to use IMX to pay 20% of the transaction fee, and users can use the token to vote on governance proposals. In addition, IMX holders can stake the tokens to obtain transaction fees paid by users to the network.When talking about L2, if Optimism and Arbitrum are not mentioned, it is obviously inappropriate.Both of these two largest Optimistic Rollups networks have raised millions of dollars in funding, and none of them currently issue local tokens. In addition, despite their short time to go online, these two L2 networks have incurred millions of dollars in transaction fees, and these fees did not flow to their users in any way. Although it is unclear whether they will issue local tokens, if they initiate retroactive airdrops for early adopters, it may be worthwhile to become an active user of the two L2 networks.The season of L2 is finally here.
Now, investors with different risk tolerance and different exposure needs can benefit from the rapid development of L2 in several ways. Whether through infrastructure, Dapps, or local asset farming, investors have many different opportunities.On September 15th, Ryan Watkins, a researcher at encryption analysis agency Messari, tweeted that the supply of decentralized stablecoins exceeded US$10 billion, accounting for 8% of the total supply of stablecoins. The DAI of the MakerDAO platform has the highest market share of decentralized stablecoins.
Subsequently, on September 17, Ryan Watkins once again tweeted that the total supply of stablecoins this week has exceeded 120 billion U.S. dollars. In the second quarter, the transaction volume of stablecoins on the blockchain exceeded US$1.7 trillion, a year-on-year increase of 14 times. At the same time, the supply of decentralized stablecoins has just exceeded 10 billion U.S. dollars and will continue to erode the share of centralized stablecoins.Watkins also believes that stablecoins have the characteristics of local digitization, global accessibility, and resistance to seizure. It can provide individuals and institutions around the world with easy access to U.S. dollars to meet offshore U.S. dollar demand. The offshore U.S. dollar market may exceed 57 trillion U.S. dollars, so stablecoins have broad prospects and are extremely disruptive. Therefore, they are closely watched by regulators.
The above two figures show the demand for stablecoins. Based on this market background, as users of stablecoins, whether they are centralized stablecoins or decentralized stablecoins, they may be affected to a certain extent by the price changes of stablecoins.For example, when users buy stablecoins and use them in exchanges, they will always be troubled by price fluctuations. The stablecoins that have been held will also receive different cash due to the pricing at the time of exchange.
In the international market of cryptocurrency, there are still some exchange stable currencies issued according to the regional legal currency. These tokens can be directly exchanged for legal currency, but the exchange requires a fee.And some fully open OTC trading markets mean that users have to pass the market pricing of stable currency acceptors to buy stablecoins.For example, USDT has been issued on many chains, and after its issuance, it needs to reserve US dollars in the bank. But it is not the issuer of USDT that controls the price for USDT. It is an acceptor. The price of an acceptor is determined by market demand. At present, the most trading pairs on all exchanges are USDT, which means that when the price of coins rises, users may increase their demand for USDT, and there will be a lot of purchases. . This will be obvious in the OTC market.But there is another feature. If the price of Bitcoin increases, the price of USDT will decrease and then slowly return to the average value. If the price of Bitcoin falls, USDT rises instead.
This means that in some characteristics, the price of bitcoin has risen, and there are more shippers, so more USDT is exchanged through the acceptor, and the acceptor will continue to reduce the U price.In the stable currency trading market, buying and selling USDT will definitely show different prices. The spread is the profit of the acceptor.
This income method will also be used as the core business of many wallets, mainly in the compliance area to complete the sale of cash to stablecoins and tokens such as Bitcoin and Ethereum.With a huge total transaction volume, the wallet can earn huge profits by charging fees.
So as long as there is a variable of acceptor in the stable currency market, the price of stable currency must fluctuate up and down. But because if the stable currency in the exchange trading pair is a legal currency anchored stable currency, it may not need to carry too much floating risk. But in the process of transaction, tokens are directly exchanged for legal currency value.It is also because, for example, USDT is a stable currency token between tokens and fiat currency, and the exchange market of USDT is a floating market, which brings about the unstable price performance of stable currency that users understand.
What about designing a stable coin to make the price the most stable design?The answer should be no, because as long as it is a stable currency issued and accepted by a trusted subject, the absolute stability of the price cannot be guaranteed, and the absolute stability of the price also means that there is no market profit margin, and it is impossible to develop a perfect business ecological structure. For example, if the ratio of USDT to U.S. dollar has no price fluctuations. The user using US dollars is the same as using USDT.The result of this is that there is no spread when the acceptor buys and sells USDT. In other words, in the exchange, there is no need to introduce an over-the-counter market, but a stable centralized exchange pool can be established directly by the acceptor. However, the most suitable role for establishing an exchange pool is the exchange itself.If you individually design a stable coin with less volatility, there are some feasible solutions. The general logic is:
If it is a centralized issuer and operator, on the basis of ensuring the scale of liquidity, it does not design an acceptance market, but only charges a small fee through a centralized pool.If it is a decentralized issuer and operator, it needs to ensure continuous issuance and maintain sufficient reserve assets and insurance assets for the issued stablecoins. The insurance assets are used to maintain the price of stablecoins and have been stable at the same level as the legal currency. 1:1 anchoring relationship within the range of small fluctuations.
If losses are caused by huge fluctuations, insured assets are needed to complete subsidies and compensation, or to supplement the shortage of reserve assets.Stable currency is an important role in the cryptocurrency world and a bridge between cryptocurrency and real finance. Today's stablecoin scale continues to rise, which is one of the important growth signals of the cryptocurrency market. The maturity of stablecoins has reason to become one of the necessary conditions for the growth of cryptocurrencies.
But today's stable currency market is far from becoming a regulated market. Decentralized stablecoins are generally used for mortgage lending or to provide transactions in a single process in other types of defi applications, which do not reflect their maximum capabilities. Centrally issued stablecoins require mature supervision. Prevent the various risks that finance may bring.Certus One initially introduced the Wormhole L1 native bridge in 2020. After auditing and going online, holders of SOL and ERC 20 tokens can now transfer their assets between the public chain ecosystem, not just Solana and Ethereum. With the launch of the Wormhole mainnet, the bridge is expanding to other L1s beyond Solana to bring liquidity from Solana, Ethereum, Terra and BSC. They are working to help developers provide more DeFi applications and a more powerful Web 3 experience.