From the Bitrue blog.
March 23rd, 2023 — With Arbitrum’s long-anticipated airdrop, Bitrue had a special “Ask Me Anything” session where we invited two notable guests online to talk about Arbitrum. Arbitrum is a type of blockchain technology designed to make decentralized applications (dApps) more scalable and efficient. It uses a technique called “optimistic rollups” to process transactions off-chain and tatch them together into a single transaction verified on-chain. This allows for faster transaction times and lower fees while maintaining the blockchain’s security and decentralization. Arbitrum is compatible with the Ethereum network, which means that it can be used to build and deploy dApps that are fully interoperable with Ethereum. Overall, Arbitrum aims to improve the usability and accessibility of decentralized applications for users and developers alike.
In the AMA session, Natalie, the Business Development Manager for FoxWallet, joined as one of the panel speakers. FoxWallet is an easy-to-use decentralized audited Web3 wallet dedicated to creating an entrance and connection to the Web3 world. FoxWallet has been fully deployed on Arbitrum and Arbitrum Nova since March 2022. It is also officially listed on the ecosystem. Arbitrum has its own column on FoxWallet’s discovery page listing projects building on the Arbitrum ecosystem.
Dora Tang, who holds an MA & BA in International Finance, MBA, and Ph.D. in IS, focusing on blockchain application research, also joined in as one of the speakers. She is the CEO of Exchangily, a new decentralized exchange platform based on the Fast Access Blockchain, and Vice President of FAB. In 2019, Exchangily was voted top 10 startups out of 100 others at an Oracle-sponsored event — FUND Conference in Chicago. Dora was also invited to speak at a Microsoft-sponsored International Blockchain Congress event in 2020. Dora also teaches graduate school at Cleveland State University on Blockchain Technology and provides training for banks.
In case you missed it, below is how the AMA panned out.
Q1. What sets Arbitrum apart from other blockchain projects focused on scalability and accessibility?
Okay, this is a very good question, actually. So, I want to summarize the current market’s scalability solution. Usually, people concentrate on five solutions. The most popular one is Sharding. Sharding is the technique that involves partitioning the blockchain into smaller, more manageable segments called shards. This is actually applicable to all blockchains or projects. So the other ones, including off-chain solutions, Arbitrum leveraged this skill. This is the off chain solution that involves processing transactions outside of the main blockchain and reducing the congestion, improving the scalability while maintaining decentralization and security at the same time. It’s the so-called trilemma. This is one of the techniques to solve the blockchain trilemma.
The third one is a Layer Two solution, built on top of the existing blockchain infrastructure to facilitate faster and more scalable transactions. The famous ones include Lightning Network, while others include the new Consensus Algorithm, such as Proof-of-Stake (POS) or DPOS. And other ones, so you may have heard of Proof-of-Production, Proof-of-History, or Proof-of-Validation. So, those are the consensus algorithms. The first factor to consider is the block size and block time adjustment. Among those, Arbitrum is leveraging Layer Two and off-chain solutions. There are a lot of them on the market. For example, for Exchangily, we are so unique. It is not a Layer Two solution, nor is it built on top of the Ethereum blockchain, but it’s combined the UTXO with scalability with some unique technique.
I’ll just drop in a few words. Yeah, because I do agree with everything Dora has mentioned. And I would also add the fact that, of course, all Layer Twos can be split into different roll-ups. Right? We have optimistic roll-ups and the zk roll-ups, those are the main ones, I would say. Yeah, the most popular ones. Arbitrum is probably scaling it the best. Although zk should be better, but at the same time, their costs are very high, and the workload is too high. So, it’s hard to say there. Yeah, well, we’ll see how zksync works. But at the same time, Arbitrum now does prove to be better, even better than Optimism.
And yeah, in terms of scalability, of course, now it proves a lot now. After Ethereum introduced POS. And actually, it worked on all the levels, apart from the gas fee. I have this amazing example, like how my friends were trying to mint a domain name about a week ago on the weekend, and the gas fee for one dollar domain name cost was like $300 or $400 or something. It was crazy. And that’s something that Arbitrum is coming here to scale up. So, I see that many projects, let’s say if they just launched on Ethereum, the second chain they would integrate is always Arbitrum. That’s usually the first choice after Ethereum.
So, it makese a lot of sense, and that’s why Arbitrum is proving what it’s meant to be. And indeed, I mean, if you guys want, you can always go to the Medium article that was posted by Arbitrum in about 2019 or something, (or 2020) when they say why Arbitrum works and why it will be better than any other rollups that are available on the market. And now it’s proving them right.
Q2. As we all know, crypto has numerous applications, including DeFi, gaming, NFTs, etc. But since we are on Arbitrum, I think we really want to discuss the importance of scalability in crypto today. Do you think scalability is, at present, the most significant barrier to widespread crypto adoption?
Scalability is actually the most important part, where all the parties are trying to solve this problem. Most of the solutions are based on the Ethereum blockchain. And in the market, it’s like divided into UTXO. Some of those blockchains are UTXO based, and most work on the Ethereum blockchain base. There are pros and cons, as always. For the Layer Two solutions, the roll-ups are the most critical part of centralized concerns. So, we’re trying to keep it decentralized, maintain safety, and solve scalability simultaneously. And that is all our pioneers are trying to solve in the field now.
I do agree, especially with the last part in terms of decentralization or centralization because, for example, like zk roll-ups. Because of the cost and the work and stuff that you have to put into that the centralization of it is much more likely. Which is something we do not want in the blockchain.
I would also add that, scalability does matter a lot. If something is taking weight like the transaction is taking way too much time or you have to spend too much cost on something when you’re just starting. Imagine this is like the starter in Web3 for somebody who knows nothing about it. You would want it to be as easy as pie. You just want to go and make things happen and be super happy about it. But if the things are too complicated, take too much time, or are too complex (which comes with this scalability issue), then, you would probably give up as a beginner, right? But, we are currently working on the mass adoption of blockchain in general.
Also, the scalability issue is important on a more global level in terms of gas fees. Transaction timing and ensuring the network goes very smoothly are also at the top of the list. That’s why we need specific mechanisms to help it go smoothly, go well, and stay calm.
Q3. While both of your projects differ in application and use case, they are similar since they are both primarily crypto wallets. Can you give us examples of how your projects interact with an Ethereum scaling solution such as Arbitrum?
Sure. Thank you for this question. Exchangily is a decentralized crypto exchange, and we are very special and unique. We’re not based off the Ethereum blockchain, and we are a blockchain developer. We developed the public blockchain called Fast Access Blockchain. It’s UTXO based and with our special technologies, KanBan and SCAR (a smart contract agent router). Those solutions actually are quite unique. We’re the first to present architecture for multi-layered blockchain solutions. On top of that, we have developed a couple of DEXs (with one based on the AMM model, and another the based on the order book model — Exchangily). It is easy to apply the order book model for CEXs, it’s a piece of cake. But for DEXs, there are a lot of challenges, such as the liquidity.
When providing liquidity, it is not as easy as the AMM model. However, we leverage the maker-taker model. If you are a maker, when you send your order voluntarily, you can make money instead of paying any transaction fees. So, that is unique and one of a kind. Moreover, we have to support massive transactions that require scalability from the blockchain. The blockchain I’m talking about, actually, we’re only talking about public blockchains because, as you know, if there are limited nodes like 21 nodes, or 7 nodes, or 11 nodes, those are truly not public blockchains. You have probably have heard it in the news. If a blockchain gets attacked, and they can stop the blockchain, I don’t consider those as public blockchains. Blockchain security and decentralization are very important.
Scalability right now is very hot in the market, and people have a lot of solutions. Right now, the throughput is pretty good for quite a few blockchains, including Layer Twos. Actually, the Ethereum blockchain trying to roll out a new version. So, I’ll say right now, the Ethereum blockchain (we tested) right now support a TPS of over 600. So, it had improved from 15 or 20 to 600. This is amazing. We are not a layer two solution. However, we support over a million transactions.
FoxWallet is one of our peers. I think decentralized wallets and DEXs is truly the future. But, we do support centralized changes because all OTC transactions need to go through CEXs to connect the fiat with cryptocurrencies in the crypto world. So, that’s my two cents.
I’ll move on with FoxWallet in terms of arbitrary. First of all, I would like to mention that we actually integrated Arbitrum and actually all the other roll-ups more than a year ago because that was one of the most important things (scaling Ethereum). We were trying to find a way in how can we make it technically really advanced for FoxWallet, because I’d say our team is more about the technicality rather than anything else. Those were the first ones that web integrated right after Filecoin and Ethereum.
Let’s put it this way, Arbitrum is basically EVM ecosystem compatible completely, right? Second, it’s basically almost everything that can be done on Ethereum can be done or on arbitrary as well. Just the only thing that the gas fee is lower and the transaction timing is much faster. So, it kind of made all the sense in that. And it did scale things a lot. Plus, we do all the time work in terms of making sure that we adapt every single update that happens on Arbitrum on our wallet as well. So, for example, it’s of course integrating Arbitrum itself. Then, we integrated Arbitrum Nova last summer. As was mentioned before, we do have a discovery page in which we have an Arbitrum column, where all the projects that we cooperated from the Arbitrum ecosystem can be listed there. Users can literally interact with them through FoxWallet. They can click on the page and open it and see what’s happening.
We do have FoxWallet listed on certain Arbitruem ecosystem projects on the front end. You can actually connect to FoxWallet through Arbitrum as well. We also integrated token approvals for space IDs with the .arbitrum domain name. We actually did it about a week ago. So we do try to go along with all the updates that are happening on Arbitrum just because everything is indeed much easier in the way of scalability. We are actually releasing a new version update of FoxWallet that will support NFTs and their management on Arbitrum actually as well.
So, we do work a lot on that because we do try to make sure that as a wallet, you want to provide the best experience in terms of anything Web3-related. Of course, Arbitrum has an ecosystem with very different projects including NFTs and everything else. So, we want to make sure that it’s super easy for users to interact through those and to have the best experience no matter which chain they choose.
Q4. Can you walk us through the process of building with Arbitrum and any unique challenges you faced? And on top of that, apart from challenges, have there also been certain benefits that you guys feel Arbitrum has compared to building with other blockchains in the past or other projects in the past?
For any new project, I think they’re always facing challenges. $ARB should have exchanged value, and usually they do bootstrapping at first. To have a lot of people follow you, to spread words in this field for people to understand and know about your project and that need a lot of marketing skills. Actually, myself, I’m not a marketing expert, but through our own experience, we have faced a lot of the same challenges. After we have put years of time and put a lot of money into development, the platform is there. But how do you let users use it and leverage it? Same as Arbitrum, I think. The same kind of challenge for anyone that is newer or you want to go out to get a piece of pie in the market. It does take a lot of work. We have made so many years of efforts try to spread the words and attending the events, talking to peers, talking to users, talking to investors, and getting feedback. All of those take time and effort. How much the token or the coin worth, that’s the core question. If you don’t have the strong exchange value to support, the project won’t be successful either. That is the challenge for most of the blockchains. From the start the Bitcoin also face the same problem.
I’d say that actually I’m not a tech person, unfortunately. I still struggle with GitHub and stuff. But from the BD side, for example, actually getting in touch with the team has been very welcoming for the projects that are building on Arbitrum. There is actually a fantastic chat for all the projects where you can post all the news when you can connect network. It’s been fantastic, to be honest. This is actually how we got to know Bitrue from the chat. Everybody there is very respectful. Things are very professional with the team itself. They knew FoxWallet through FilFox because our tech team, who developed an Explorer on Filecoin before. Some of the senior guys in Arbitrary actually tried our product and they were like, this product is super nice, so we’re trusting you and stuff. So, that’s how I got to it.
So, from my side, it was pretty nice and they were very supportive. But from the tech side, I do try to keep the track of what’s happening in the tech chats. But at the same time, I wouldn’t say that I’ve seen anything kind of challenging in terms of integration or anything. I think it was pretty smooth for our tech team right now. Also, we can always keep in touch with the team. We’ll always ask questions if there’s anything. So, in terms of just working together with Arbitram, it’s been pretty smooth. It’s been pretty nice. But of course, let’s see what happens when the arbitrary with the airdrop happens. We’ll see how the project will go because marketing wise, I guess that was a very smart move even though they’ve always been saying they wouldn’t do it, but still. So, we’ll see how the project goes on after that.
Q5. While the focus of today’s AMA is on Arbitrum, I think it’s also important to get into the discussion on how both your projects differ in comparison to Arbitrum. If it’s possible, it’d be great if both of you could tell us a little bit more about your projects and how they differ from Arbitrum.
We’re not based-off or related to the Ethereum blockchain. It’s more of a combining UTXO plus the smart contract function. I would consider Arbitrum, as a solution and our peer. We support all peers because all of us we are working in this field so that blockchain projects can become popular and change lives for people. From what FoxWallet had mentioned, I know that the Ethereum blockchain is such a strong leading community and everything goes very smoothly. But as a blockchain for us at Fast Asset Blockchain, we have been facing challenges since the early years. For everything we develop, we actually make effort and put lots of money inso that we can find a solution for scalability and to successfully solve the trilemma problem.
We have developed not only a DEX, but also blockchain ecommerce, blockchain gaming, and a blockchain payment system. The payment system actually supports all major blockchains. You can make a payment very safely in a couple of seconds. Our Pay.Cool have just been approved by the El Salvador government. They only issued us up to three licenses and we are granted with the license to operate as a DEX, as a payment system, and also as a wallet. From a country, from a federal level, it is truly amazing how El Salvador consider Bitcoin legal. We really appreciate that and they are also building the Bitcoin city. I think that in the field, that is a big deal as well and we are participating in building the Bitcoin city as well.
So, that is our progress. I truly think that in the future, applications will be the major leading developing area. Concerns like how the token is valuable, how it can be utilized, how it is useful, what use cases and how it can solve actual problems (like payment problems), how it can make it fast and secure will be prioritized. We want to be able to make a payment to anywhere from anywhere and everywhere, in any country, and around the globe. So, that’s the problem we are solving right now. We have successfully launched the payment project. It’s called Pay.Cool. It will give the space more confidence to support all usage for cryptocurrencies.
I guess the difference between FoxWallet and Arbitrum is massive. Because first of all, we are in completely different fields in terms of we are a decentralized wallet while Arbitrum is a chain. But at the same time, I guess if Arbitrum, if they launch their own wallet, then probably there could be some common things and at the same time there would be a competitor issues in a way. That’s why actually in most cases chains don’t really choose that only one, two, or three wallets that they would be working with. But they try to give support to all of the wallets that are building on those certain networks or chains.
But one of the things that same as Arbitrum for example, has a few wallets that are building on it that integrated the chain onto their front. At the same time, FoxWallet is a wallet. We can’t only be focusing on Arbitrum for example. So we’ve integrated more than 40 different EVM and non-EVM compatible chains. So, we’re kind of like of course we’re super bullish about Arbitrum. We do believe that it will go big, it will be really successful. But at the same time, of course we try to give a fair share of support to every single chain that we integrate because if we do integrate a chain or a network, it means we do believe in it from a technical point of view. First of all, I guess that’s why as I mentioned before, that’s why we integrated Arbitrum. We are quite different in terms of everything we do, probably. And at the same time each of us needs the support from one another. For Fox Wallet, it’s important to integrate chains like Arbitrum because they bring scalability to us. They bring faster transactions to our users, to people who store their funds in the wallet. At the same time, they bring lower gas fees. We need Arbitrum and Arbitrum needs us as the ambassadors of Arbitrum’s services. We always need each other, FoxWallet and Arbitrum. But at the same time, we are in completely different fields.
Q6. With a project of such size and scale like Arbitrum, it takes a lot of capital to continue to literally scale its user base while ensuring that the product is able to keep up with the growing number of users.
What do you think are some factors that will be important in maintaining Arbitrum’s growth for the long run?
Since Arbitrum really belongs to the Ethereum community, the bigger Ethereum community, the more support they will get from the extended community, like FoxWallet. It will support the Arbitrum blockchain, which is great. I think it’s good for everyone. For us, because Arbitrum is our peer, we’re totally different blockchains, we’re not Ethereum-based but UTXO-based. We will actually support Arbitrium as well. As a lot of CEXs are listing $ARB, we would also like to list $ARB on our DEX as well. For a decentralized exchange it’s quite different, right? You control your own assets and you don’t have a problem of theft or any runaway problems. However, there is a liquidity problem. So, I hope that people that who love $ARB not only trade on CEXs can put in some orders, and also try DEXs so all of us can grow together.
Yes, I do agree with everything Dora has just mentioned and probably will just add something more from the history POV. From what I remember, Arbitrum launched in 2019. At least the idea was launched by Offchain Labs. So let’s say why they were actually able to go through everything, why were they able to maintain all the work through all the years and where they are right now? I mean, it was launched Offchain Labs first of all, which is a very trustworthy company. We are talking about not just the beginners but people who knew what they were doing in the way.
Secondly, in 2021 I think they had fundraising and they raised $120,000,000 from what I remember. So they did raise enough to sustain a very balanced project life and stuff. They could make sure of everything go well and smoothly.The third thing was it kind of pumped up recently because of the whole talk of the layer two is the new thing. Finally people are kind of learning more about it and also the fact that they are launching the token. Yeah, there’s going to be the airdrop which as I mentioned before is a very good marketing tool because through all the years since they launched they were always stating that they have no plan to launch the token.
There was always something about how they don’t need because of whatever, you can always find it in all the articles that were officially posted by Arbitrum. There was always a statement that no, we don’t plan to do any token launch or anything and then all of a sudden they do it. I think it was of course triggered by the fact that Optimism had an airdrop and then the fact that zkync is planning one. So, obviously it would take a big share of the market, like their tokens would take a big share of the market. So, it kind of makes sense that Arbitrum launching the token and now actually by TVL. If you look at L2Beat, you will see that it’s the first one in terms of TVL out of all the Layer Twos in blockchain. So, I mean it is proving them right. So yeah, it was only the right thing. They did the right thing at the right time I guess. And yeah, that’s how they kind of sustained it.
It’s the right strategy as well probably because as I said, the team had experience way before that. So they knew what they were doing, they probably picked the right strategy and they are doing things as they go. And as Dora mentioned before, of course they do have the support of these many dApps that have integrated Arbitrum because obviously everybody wants the scalability to finally be solved, right? For the gas fees to be lower or to disappear completely hopefully, one day and of course, for the transactions to be faster and that’s what Arbitrum providing back then. Now, it’s even more relevant, especially after their airdrop. It will be so much more relevant and of course it will bring them very big success.
Q7. Do you think it’s a sustainable play in spreading the news about Arbitrum in the long run?
I do like the airdrop idea. I think almost 100% of projects, they start to attract the attention that when they announce airdrops. Through airdrop, some would hold a little bit of ARB in their wallet, then they will care about the price, how the project developed and everything. I think it’s a good idea to give out some free tokens for those people who participated in the space. And I really wish that the Arbitrum has great success in the space with the $ARB airdrop. And for those people who participates today, I believe each one of us probably would like to hold some of the $ARB through this airdrop experience. For us, we have listed quite a few projects and those projects, they all give our community some airdrops. Some sold it right away while others hold on to it. I think for good projects and if really have confidence in their project, you should probably hold it instead of selling it right away. I mean, holding tokens, sometimes, will really bring handsome rewards hundreds of times.
However, we should read their technical papers and get to know the project better and be more comfortable and confident in the project then we’ll hold it for long. We always talk about HODLing a token. So, you will have not only a financial gain in the long term and it’s also kind of a way for you to support the project. If we have a confidence on the project, we should HODL instead of liquidating it right away. So that’s just my two cents.
I just wanted to say that I completely agree with Dora and I guess there’s nothing else to say, but yeah, indeed hold, especially if the community wants to support the project and stuff and especially something like Arbitrum. It does make a lot of sense.
This article came directly from the Bitrue blog, found on https://bitrue.medium.com/highlights-from-whats-arb-with-arbitrum-ama-session-on-twitter-space-fbba4dcc9c69?source=rss-c4759c9c6535——2