Did Arbitrum Miss the Opportunity? Discussing the Competitive Landscape of Layer 2 Track

Many people believe that Arbitrum's strategy of attracting users through airdrop expectations is a wise move. From a tactical perspective, this view seems reasonable. However, from a more macro ecological development perspective, it may miss the best strategic opportunity.

The golden age of Arbitrum has passed

In the six months since a well-known L2 platform launched its token economy, Arbitrum had the opportunity to launch its own token economy, but unfortunately missed it. Before this, Arbitrum's TVL accounted for over 55%, while the platform had only around 5%, approximately one-tenth of Arbitrum.

After the platform launched its token economic incentives, according to data from the platform, its TVL has reached 57% of Arbitrum and is developing rapidly. In addition, its ecological projects are also beginning to thrive. For example, SNX and Perp have shifted their focus from Ethereum L1 to this platform, and several native projects such as velodrome are gradually attracting users.

From the perspective of historical total transaction counts and active users, the platform is closing the gap with Arbitrum.

If Arbitrum launches a token economic mechanism in the past six months, it could significantly boost the development of its ecosystem projects, considerably increase TVL, and create strong appeal. In this case, it could greatly suppress the rise of competitors.

Competitors have gained an opportunity window of over six months, and this window is still ongoing. The previously absolute dominance of Arbitrum (similar to Opensea's position in the NFT market and Uniswap's in DEX) has now evolved into a dual-strong pattern of Arbitrum and its competitors.

The advantages of Arbitrum are not eternal.

Currently, there are some excellent native projects on Arbitrum, such as GMX and the MAGIC ecosystem. Additionally, projects like GNS and RDNT are also gradually developing. Overall, the user experience is good. However, these advantages may not last forever.

Arbitrum adopts off-chain execution multi-round fraud proof technology, which indeed has its unique advantages compared to certain platforms that use on-chain execution single-round fraud proofs. Additionally, migrating Ethereum L1 projects to Arbitrum is relatively easy. However, these technical barriers do not constitute an insurmountable moat. Once EIP4844 is implemented at the end of the year, these advantages may gradually diminish.

A certain platform's bedrock is about to be launched, and its modular L2 network will also be gradually implemented. Currently, major exchanges have joined its ranks, launching an Ethereum L2 network testnet based on its tech stack. With the rollout of the modular L2, it will attract more project participants. From the perspective of future patterns, the certain platform occupies a favorable position.

The platform is also actively researching zk-Rollup technology, which may be used to upgrade based on the existing ecosystem once the technology matures.

In addition, through a well-designed airdrop mechanism, the platform successfully converted some speculative users into users within the ecosystem. From the perspective of mechanism design, there are experts in the team who are very knowledgeable about community operation and economic mechanism design. Not to be underestimated.

If the platform's modular L2 performs exceptionally well, along with other technological iterations, where does Arbitrum's sustainable competitive advantage lie? It is important to note that the Layer 2 track is still in its early stages, and an absolute king has yet to emerge.

A lesson from the predecessors of the ### NFT platform.

A well-known NFT platform has not launched a token economic mechanism for a long time. Initially, its market share was not significantly affected, peaking at over 90% market share. Its dominant position was even stronger than that of the leaders in the DEX field. On the surface, everything looks great, and not launching a token incentive mechanism seems to be a winning strategy.

However, the emergence of new platforms has disrupted everything. The bidding mechanism of the new platforms, combined with token economic mechanisms, has posed a significant challenge to the established platforms. If the old platforms do not introduce a token economy in the future, losing their throne may become a reality. To some extent, the new platforms have also learned from the experiences and lessons of their peers, making it an innovative iteration built on the efforts of those who came before.

Arbitrum is currently flourishing, everything seems beautiful, and projects and users are continuously entering. However, changes in anything do not happen overnight. Crises often arise during times of prosperity, so we should remain vigilant even in times of peace.

Arbitrum should plan for ecological projects

The development of Arbitrum relies on the contributions of native projects such as GMX and MAGIC. It's time to provide more traffic and ecological incentives for these projects. Only in this way can mutual promotion be achieved, forming a larger and more sustainable ecological network.

If Arbitrum stagnates, it would not be surprising for GMX and MAGIC to launch their own dedicated chains on other L2s in the future. Everything is possible in the future.

Arbitrum's historic opportunity

L2 is one of the biggest opportunities in the crypto space, with the potential to produce the largest king in the crypto realm. Arbitrum is in an excellent position, and if it can seize this opportunity, it may stand out among many L2s and become one of the kings.

Even if the Zk EVM technology matures gradually in the future, Arbitrum will have the opportunity to migrate its ecosystem there. While technical barriers are important, the ecosystem network and resilience are even more valuable.

I hope Arbitrum can seize this historical opportunity to become the king of L2. Before truly achieving community governance, everything depends on the decisions made by the Arbitrum team. A single thought could determine the historical landscape of future L2.

Risk Warning: The above analysis is based solely on a partial observation of technology and the market, and may not be accurate. Please be sure to maintain independent judgment and implement proper risk control.