Layer2 Competition Heats Up: How Can Arbitrum Continue to Break Through?
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Layer2 Competition Heats Up: How Can Arbitrum Continue to Break Through?
How will the Layer2 sector evolve in the future?
Navigating Web3 tides with focused insightsAuthor | Baicai Blockchain
This year, Ethereum L2 has seen explosive growth. Similar to the earlier surge in public blockchains, a large number of projects have begun positioning themselves in the Layer2 space. Arbitrum, as a scaling solution in the Optimistic Rollup category, gradually stood out following its Airdrop campaign in February.
We interviewed Nina, Offchain Labs' APAC Head; Jason, Offchain Labs' APAC Engineer; and Shin, Arbitrum Foundation's Chinese Community Lead, to hear their thoughts on how Arbitrum is responding to intense competition from new entrants in the Layer2 race, and their views on the future evolution of the Layer2 landscape.
1. As a leader in the Layer2 space, how does the Arbitrum team view the evolution of Layer2 within the Ethereum and broader blockchain ecosystem, and its impact on the entire crypto industry?
Offchain Labs: Layer2 exists to scale Ethereum while maintaining security and decentralization. From day one, Arbitrum included full fraud proofs, and since then Offchain Labs has iterated multiple times on its tech stack, introducing Nitro, Stylus, and BOLD.
Additionally, for developers, most Layer2s use EVM, enabling seamless migration of Layer1 projects with no code changes required—developers can easily deploy their products to Layer2 using existing tools. For users, the significantly lower gas fees and faster transaction confirmations on Layer2 allow Web3 applications to deliver a Web2-like user experience. As Layer2 technology continues to improve, we expect increasing numbers of users and developers to join the Layer2 ecosystem.
2. The Layer2 space is now highly competitive. ZkSync and Starknet have rapidly grown in user count and TVL due to airdrop expectations, while Base, backed by Coinbase’s resources, has emerged as a dark horse. How is Arbitrum responding to this intensifying market competition?
Offchain Labs: To reach a billion users, you first need millions of developers. If approved via DAO vote, Offchain Labs’ new tech stack for Arbitrum—Stylus—will allow developers to deploy programs written in Rust, C, and C++ on Arbitrum. There are approximately 3 million Rust developers and 12 million C++ developers worldwide. With Stylus, Arbitrum opens a new gateway for the Ethereum ecosystem beyond its current 20,000 Solidity developers.
Previously, on other chains, EVM and WASM did not share the same state, meaning new WASM developers couldn’t interact with the existing EVM ecosystem. Stylus (EVM+) breaks this barrier, enabling both EVM and WASM developers to build together within the same ecosystem without limitations.
3. Arbitrum recently launched the major tech stack Stylus. Can Stylus be seen as a killer feature introduced to address fierce competition? What kind of impact could it have on the broader sector?
Offchain Labs: As mentioned above, we aim to attract more Web2 developers into Web3. These three programming languages—Rust, C, and C++—surpass Solidity in both developer base and tooling support. Meanwhile, existing Web3 developers can integrate WASM-written libraries into their contracts. WASM contracts can easily interact with Solidity contracts, or even rewrite and upgrade existing Solidity contracts, enabling more efficient and lower-cost execution. This will further reduce user costs, enhance blockchain performance, and drive innovation in application development.
4. Currently, the Arbitrum ecosystem is arguably the most mature and richest among all Layer2 ecosystems. However, chains like Base have recently seen some extremely popular native projects emerge. In a bear market, competition is largely about capturing existing value. How do you view competition between Layer2 ecosystems, and what new moves might Arbitrum make in the future?
Offchain Labs: We see competition in this space as healthy and beneficial for users. We welcome competition and firmly believe Arbitrum offers the best technology and Ethereum scaling solution.
Offchain Labs will continue evolving alongside Arbitrum, delivering optimal technologies and products for users and developers, giving them confidence to keep choosing Arbitrum. We’ve already launched the Stylus testnet and Orbit testnet deployment. Going forward, we’ll closely monitor user feedback during testing and strive to deliver the best possible user experience upon mainnet launch. Additionally, we’re actively researching sequencer decentralization and will release detailed plans in the near future.
5. High-quality native projects are crucial for Layer2 ecosystem growth. Looking back, what do you think enabled Arbitrum to host enduringly popular native projects like GMX? Are there replicable elements in that success path?
Offchain Labs: Arbitrum hosts one of the strongest DeFi ecosystems outside of Ethereum itself. Many innovative and high-quality projects choose to deploy on Arbitrum because of its vibrant community and the presence of other strong projects they want to collaborate with. Moreover, projects and community members on Arbitrum are highly cooperative, actively working together to build a robust ecosystem and superior products. We also place strong emphasis on developers, continuously improving our developer tools. For example, we provide comprehensive Arbitrum Tutorials for new community projects, and offer an Arbitrum SDK for developers already building on Arbitrum—both of which reduce the extra workload involved in Layer2 development and make it easier for developers to get started.
6. Many Layer2 projects are now launching Layer3 solutions, and Arbitrum is no exception. What is your outlook on the future of Layer3?
Offchain Labs: Arbitrum has launched its own Orbit Chains (L3). Orbit Chains offer low fees, low latency, and customizable features including gas and privacy settings. When using Orbit, users can choose between Rollup or Anytrust modes, select either Arbitrum One or Arbitrum Nova as their data availability layer, and even customize their gas token beyond ETH. Furthermore, Orbit chains can independently decide whether to adopt any future tech stack upgrades from Arbitrum. We believe that in specific domains, Layer3 development may even surpass many Layer2s.
7. There has been widespread belief that ZK-Rollups represent the optimal Layer2 solution. What’s your take on that?
Offchain Labs: While ZK-Rollups can achieve fast finality through zero-knowledge proofs, their massive computational overhead and performance bottlenecks mean that, at least currently, they lag behind Optimistic Rollups in both performance and cost efficiency. Our goal is to deliver technology solutions that meet today’s market needs, and Optimistic Rollup remains the most suitable solution right now. That said, Arbitrum’s technology continues to evolve—we are actively researching cutting-edge ZK technologies, and once ZK matures, we may incorporate it into our product offerings.
8. Finally, can you share Arbitrum’s future roadmap and vision?
Offchain Labs: Offchain Labs will continue advancing Arbitrum’s technology. Near-term priorities include launching the Stylus mainnet version, rolling out the permissionless verifier (BOLD, developed by Offchain Labs), and decentralizing the Sequencer—to deliver a high-performance, highly secure Layer2. Of course, all these upgrades require approval via DAO voting before implementation.
In addition, the Arbitrum Foundation recently launched two initiatives: a Grants Program and a Student Ambassador Program. The Grants Program provides staged funding to different categories of projects and organizations within the Arbitrum ecosystem. The current phase focuses on dApps and infrastructure projects actively building on Arbitrum. The Student Ambassador Program aims to empower students to represent Arbitrum within their universities and local communities, while simultaneously building their personal reputation and influence.
In the near future, the Foundation will roll out a new phase of the Ambassador Program, opening participation to non-student community members and technical contributors.
Now and in the future, we look forward to seeing more participants from Greater China actively engaging in these programs!
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