Arbitrum Foundation Introduces New Initiative

The Arbitrum Foundation, responsible for Ethereum’s leading Layer 2 network, has announced the launch of the Arbitrum Expansion Program. This groundbreaking initiative enables the creation of custom Layer 2 and Layer 3 networks using the Arbitrum Orbit tech stack.

Customizing Rollup Chains with Arbitrum Orbit

Unveiled on January 18, the program allows developers to launch tailored rollup chains based on the Arbitrum Orbit stack. These modifications can include Layer 2 networks settling on Ethereum’s mainnet or Layer 3 networks utilizing other Ethereum Layer 2s for finalization. The Orbit deployment tool comes with extensive customization options, facilitating the development of chains with unique features like custom gas tokens and alternative data availability solutions.

Arbitrum Foundation’s Revenue-Sharing Model

While Orbit-based Layer 3 networks built on top of Arbitrum One and Nova L2s can be customized freely and permissionlessly, other deployments are subject to a revenue-sharing agreement with the Arbitrum DAO. This arrangement, initially set at 10%, includes contributions to both the Arbitrum DAO and the Arbitrum Developer Guild, aimed at fostering ongoing development within the Arbitrum ecosystem.

Rival Ethereum Scaling Solutions

Arbitrum’s Expansion Program positions it competitively against other Ethereum scalability teams, like Optimism and Matter Labs. Each of these teams has introduced their technology stacks, such as Optimism’s OP Stack and Matter Labs’ ZK Stack, to enable developers to build custom Layer 2 networks. For instance, Optimism’s Superchain concept promotes interoperability between OP Stack-based chains.

Market Dominance and Interoperability

Arbitrum One currently holds a significant market share in the Layer 2 space, with a total value locked (TVL) of $10.8 billion, representing 51% dominance. In comparison, chains using Optimism’s technology account for $8 billion in TVL. Arbitrum is also exploring solutions for interoperability between Orbit-based chains, mirroring Polygon’s approach with its Chain Development Kit (CDK).

Arbitrum’s Strategic Move

The Arbitrum Expansion Program marks a strategic move by the foundation to increase its market share and drive new revenue sources. This initiative not only enhances the Arbitrum ecosystem but also contributes to the broader development of Ethereum’s Layer 2 and Layer 3 solutions, positioning Arbitrum as a key player in the evolving landscape of blockchain technology.