An introduction to the Arbitrum ecosystem (part 2)
In the first part of this article, we explored the basics of the Arbitrum ecosystem and its unique features, including its use of optimistic rollups and its compatibility with Ethereum. Now, we'll delve deeper into other protocols that are building on top of Arbitrum. Let’s take a closer look at some of the most promising projects in the Arbitrum ecosystem and explore his own token $ARB.
Radiant
Radiant is a lending protocol on the Arbitrum network that allows users to borrow or lend various assets. The main objective of the Radiant DAO is to unify the dispersed liquidity that exists across the top ten alternative layers.
Radiant is omnichain : so you'll be able to borrow on any LayerZero-supported blockchain. It will facilitate the lending and borrowing for the whole space.
Here's how lending and borrowing works :
When borrowers pay interest, 50% of it goes to lenders to encourage liquidity, while the other 50% is given as real yield to those who hold $RDNT tokens.
There has been a sharp increase in the TVL of the protocol in recent months, which is likely to continue with the $ARB airdrop that will trickle into the Arbitrum Dapps.
Source : Dune
Radiant have great partnership with LayerZero and Chainlink.
Tokenomics
RDNT, an OFT-20, is Radiant's native utility token.
Allocation:
The allocation is fair between stakeholders. We can see that they keep a huge amount of token to incentive the protocol TVL over time. On the release side, it’s linear over time without massive unlock.
Only users with locked dLP (liquidity tokens) activate eligibility for RDNT emissions on their deposits or borrows.
$RDNT lockers receive fee distribution.
- 60% Lockers
- 25% Base fee for lenders
- 15% DAO controlled operating expenses
Emissions have been lowered to reduce inflation and maintain them in the long turn for incentive the protocol.
Here is the metric of RDNT token :
Source : Tokenterminal
Y2K
Concept
Y2K is the first protocol to offer structured products, through which market participants can hedge against the risk of different exotic pegged assets.
Two vaults are live :
-Risk vault allow users to gain a yield by depositing and underwite the risk of depeg
-Hedge vaults is the opposite. Users pay a premium and purchase insurance. Currently, users can hedge against FRAX, USDC,USDT, MIM, and DAI de-pegging with weekly and monthly time periods
After depositing in vaults, users receive a semi fungible receipt of the deposit.
By locking $Y2K tokens for the $vlY2K token, holders can gain additional governance power within the Y2K ecosystem and earn a greater share of the revenue generated from protocol fees.
Holders of the vlY2K token can receive 50% of the total protocol fees generated on the Y2K platform, while the remaining 50% is set aside in the DAO Treasury to fund maintenance and upkeep of the protocol.
Y2K tokens are distributed in liquidity mining for vault participants.
Inflation is reduced each epoch to avoid diluting holders too much.
Plateform revenue are in ETH and heavily increase in case of depeg event.
For exemple, during the USDC depeg event of 11, 12 march more than 700K$ fees have been collected for the treasury (35eth) and vlY2K holders (35eth).
- 2 depeg on monthly vault
- 5 depeg on weekly vault
- 1400 ETH lost by Risker
More information on the protocol here.
There are lots of ingenious protocol in the Arbitrum’s ecosystem. I encourage you to dig the space. Other protocols such as Dopex, Ragetrade, Gains Network, Plutus or Treasure dao are really interesting and have a bright futur.
$ARB token
Governance
I will finish this article with the presentation of the $ARB token that was announced this Thursday, March 16!
The token was launched in order to develop the DAO, decentralize the chain and secure the network.
“Self-executing governance is a critical milestone for decentralization, and Arbitrum is leading the way as the first L2 to launch self-executing governance”.
The Arbitrum Foundation has created the “Arbitrum Security Council”, which consists of 12 respected community members in a multisig format. This council has been established to guarantee the security of the chains and to be able to respond rapidly in the event of a security breach. The DAO will have the power to retire the Council if necessary.
The Arbitrum technology is considered the most advanced rollup stack available today. The recent announcement includes the introduction of Arbitrum Orbit, which will enable developers to easily launch their own Layer 3 (L3) blockchain in the Arbitrum ecosystem without permission requirements. Developers who launch L3s on Arbitrum One and Nova are automatically given a free and perpetual license to use, modify and customize Arbitrum's technology for their L3 chains. Furthermore, Arbitrum Orbit L3 chains will also support the forthcoming release of Arbitrum Stylus, which allows developers to use programming languages like C, C++, Rust, and Solidity in their chains.
$ARB tokenomics
Arbitrum has finally announced the launch of its token that will serve as governance.
Here is the token allocation :
Source : Dune
Let’s have a look a the supply schedule.
Source : Flip Research
While the user and DAO airdrops will be available in one week, all investor and team tokens are subject to 4 year lockups, with the first unlocks happening in one year and then monthly unlocks for the remaining three years. The token is inflationary until early 2027.
An interesting thing to note is that it was Nansen who designed the eligibility criteria. Among them :
In the end, these are more than 625k wallets that ended up getting the airdrop, the distribution of which you can see below :
Source : Nansen
This represents one of the biggest airdrops in the same way as DYDX, ENS or Uniswap.
We must keep in mind that part of $ARB tokens will be given to the blockchain protocols. The team can decide to keep them to build/upgrade the protocol or distribute among users to bootstrap TVL.
Finally Abitrum Odyssey will resume in the coming months!
For those who don't know, Arbitrum Odyssey was an 8-week program aims at exploring new protocols on Arbitrum. At the end of each week, one or more NFTs can be claimed by program participants.
With all of theses incentive (Arbitrum Odyssey and $ARB allocated to the ecosystem), we should therefore expect an increase in Arbitrum's TVL as a whole, as it happened with Optimism.
Please, feel free to check the official medium for more information.
Summary
Arbitrum ecosystem has seen a surge of new applications since its launch, including popular decentralized exchanges (DEXs) such as Uniswap and GMX, as well as other
DeFi protocols like Aave, Curve, Y2K. Additionally, there has been a growing interest in gaming and NFT applications on Arbitrum, with projects like Aavegotchi and Magic gaining popularity. With the recent launch of Arbitrum Orbit, which allows for easy launch of Layer 3 blockchains on the Arbitrum network, we can expect to see even more diverse and innovative applications being developed in the near future. Overall, the growing ecosystem of applications on Arbitrum indicates a strong demand for Ethereum Layer 2 scaling solutions and a promising future for the platform.
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