Although there were rumors that Arbitrum would issue a coin after Optimism, another Layer 2 leader, issued a coin last year, but it ultimately failed to materialize, now that such news has been released again under the "Bull" market, user sentiment is obviously even higher. Influenced by this, other projects in the Arbitrum ecosystem that have issued coins have all seen a significant increase, becoming the center of community discussion.

Before introducing the projects in the Arbitrum ecosystem, let me first briefly introduce the Arbitrum project itself and why its coin issuance can cause such a great FOMO sentiment in the market.

Arbitrum is Ethereum's Layer2 expansion solution, which was created to solve the problems of high GAS fees and network congestion faced by Ethereum. Layer2 is a general term for Ethereum expansion solutions. Among all the current Layer2 projects, Arbitrum ranks first with a locked amount of US$1.46 billion, while its main competitor Optimism has a locked amount of US$80 million. Moreover, compared with other mainstream public chains, Arbitrum is second only to Ethereum, BSC and Tron, and is better than the old Polygon, Avalanche and Solana.

Arbitrum also belongs to the public chain track in a broad sense. We all know that in the last bull market, the public chain tokens mentioned above, such as MATIC, AVAX, and SOL, have increased by dozens or even hundreds of times, and Arbitrum has defeated these opponents even without token incentives. It can be said that it is very strong. Under such expectations, it is not difficult to explain why Arbitrum's coin issuance can attract such high attention.

The reason why Arbitrum can obtain such a high lock-up volume is of course due to the ecological projects on it. Compared with Ethereum, Arbitrum is faster and has lower fees, and Arbitrum is fully compatible with smart contracts on Ethereum, that is, Dapps on Ethereum can be migrated to Arbitrum without changing the underlying contracts, which greatly reduces the deployment threshold for developers. Therefore, Arbitrum has both native projects such as GMX and Dopex, as well as DeFi applications from other chains such as AAVE, Curve, and Uniswap.

This article will review the native projects on Arbitrum that are worth paying attention to.

GMX

GMX is a decentralized contract exchange.

Since the FTX collapse in November last year, more and more users have chosen to move their assets from DEX to the chain for trading to avoid problems such as DEX running away, collapse, and plug-in problems. GMX has also become one of the projects with the greatest profits in this trend.

From the GMX product page, GMX has three main functions: long, short and swap, and supports contract transactions up to 50 times. However, GMX can currently only trade ETH, BTC, LINK and UNI. Regarding this issue, the team has stated that it will support more currencies through synthetic assets in the future to provide users with more trading options.

In addition to contract trading, the Swap function is also a major feature of GMX. The Swap function of GMX uses its own unique LP mechanism instead of the common AMM, which provides zero slippage in the trading experience. For example, if you exchange $10 million worth of assets on Uniswap at one time, the slippage may be as high as 60%, while on GMX there is no slippage loss, and you only need to pay a 0.03% handling fee.

GMX currently has a daily protocol revenue of around $400,000, ranking fifth among all public chains and applications. 30% of GMX protocol revenue is distributed to GMX platform token stakers every day. Currently, nearly 80% of GMX is staked, with an annualized rate of return of around 9%.

Project link: https://gmx.io/#/

Dopex

Dopex is an on-chain options trading platform.

An option is your right to buy or sell an underlying asset at a certain price at a certain time in the future. For example, if you are optimistic about the future price of ETH, you can pay a certain premium to buy a call option. If ETH rises at expiration, you can choose to exercise the option and earn the difference. If the price falls, you can choose to give up the exercise and only need to pay the premium. Options are generally used as a tool to hedge contract risks.

As a decentralized options protocol, Dopex is not a traditional order book model, but like most DEXs, it is an AMM model. That is, whether you are bullish or bearish, your counterparty is the liquidity pool, not the trading party of a specific order. The advantage of this method is that it increases liquidity and avoids the situation where some orders cannot be traded.

Dopex currently provides options trading for 8 tokens including BTC, ETH and some ecosystem projects on Arbitrum. Users can purchase call or put options, or provide liquidity for option vaults and charge option fees to those who purchase options, thereby earning profits.

The total locked value of Dopex protocol is currently 57 million US dollars, and the platform token is DPX. Similar to other projects, Dopex also provides staking incentives. 70% of Dopex protocol revenue will be rewarded to DPX stakers. The current staking yield is about 27%.

Project link: https://app.dopex.io/

Radiant

Radiant is a full-chain lending platform.

Radiant uses LayerZero's cross-chain technology to support users to deposit money on Arbitrum and then borrow money from other public chains. For example, you can deposit ETH as collateral on Arbitrum, then borrow USDC from Polygon and use it directly, eliminating the trouble of users having to repeatedly cross chains between different chains, which is very convenient.

Radiant is also very simple to use. You can choose DAI, USDC, USDT, ETH and WBTC as collateral to deposit into the protocol. Then you can get new liquidity to use without selling tokens, thereby improving your capital efficiency.

After the deposit is successful, you can enter the loan page to borrow money. The system will automatically calculate your loan amount based on your deposit amount. After selecting the currency you want to borrow, you only need to enter the loan amount and the public chain you want to borrow.

Radiant's platform token is RDNT. All of the platform's protocol revenue will be distributed to RDNT stakers. The current annualized return on stakes is 13.9%.

Project link: https://app.radiant.capital/#/markets

Vesta Finance

Vesta Finance is a stablecoin lending protocol.

Vesta Finance allows users to deposit collateral to mint USD stablecoin VST. In addition, while users obtain stablecoins, Vesta will also obtain additional income for the collateral deposited by users, such as directly depositing assets such as GMX and GLP into GMX to earn income for users.

Vesta Finance is actually also a protocol that improves the liquidity of user assets through pledge lending. The biggest difference from the Radiant platform mentioned above is that Vesta can only lend stablecoins, and it is the platform's own stablecoin VST.

Vesta Finance currently supports collateralized lending of five assets: ETH, gOHM, GMX, DPX, and GLP. The minimum collateral rate for ETH is 110%, and the minimum collateral rate for the other assets is 150% (120% for GLP). For example, if you want to borrow $1,000 in VST, you need to pledge at least $1,100 in ETH or $1,500 in GMX (excluding handling fees). Of course, this is the most extreme way of borrowing. Generally, users will choose to pledge more assets to reduce liquidation risks.

If you stake GMX or GLP, Vesta will automatically take the staking for you and give you part of the interest. The current annualized return on GMX is 5.09%, and the annualized return on GLP is 16.89%. That is, while you are lending money in Vesta, you can also enjoy a little interest.

Vesta can help us improve the annualized return of GMX or GLP. Simply put, we can obtain more GMX or GLP through repeated pledge and borrowing and deposit them into Vesta to obtain returns. However, this method is also very risky and will not be elaborated here.

Project link: https://vestafinance.xyz/

Gains Network

Gains Network is a decentralized trading platform.

Gains Network is almost the same as GMX in terms of product positioning, both are trading markets for cryptocurrencies and derivatives. Gains has two major features compared to GMX, namely, a rich variety of transactions and ultra-high leverage.

In addition to cryptocurrencies, Gains also supports stocks and foreign exchange. Gains has nearly 100 trading pairs, including 40+ cryptocurrencies, 20+ foreign exchange and 30+ tokenized stocks, and will launch commodity trading in the future.

Gains offers traders up to 150x leverage on crypto assets, 100x leverage on stocks, and 1000x leverage on forex trading, the highest leverage among all DEXs.

Gains currently has more than 10,000 trading users with a total locked-in volume of more than 47 million US dollars. The protocol has generated a trading volume of 27 billion US dollars to date and earned nearly 20 million US dollars in revenue, of which 32.5% was allocated to its platform token GNS stakers and the protocol's liquidity providers.

Project link: https://gains.trade/

Summarize

The public chain has always been a track that has attracted much attention in the crypto market. As more and more users seek faster transactions and lower network fees, Layer2 as an expansion solution for Ethereum is also receiving more and more attention. As a result, Arbitrum has been able to grow rapidly and has unknowingly ranked fourth among all public chain projects. Its future development is also bright.

The growth of Arbitrum will inevitably drive the development of its ecosystem. The derivatives track in the Arbitrum ecosystem can be said to be the strongest among all public chains, and a "flywheel effect" has been initially formed. To quote Twitter user @Vic TALK, derivatives protocols such as GMX and Dopex are similar to casinos, with continuous business income; and various types of revenue aggregators use their own strategies to continuously attract funds and expand revenue; more people participate in the revenue aggregator, more liquidity, and more and more income, thus forming a flywheel to promote the continuous development of the entire Arbitrum ecosystem.