Open Analytics Bounty: Arbitrum (August 13)
Question:
Flipside Crypto has built pathways and provides the tooling for you to develop deep and thorough crypto analysis. Now, we want to see what you can do with them.
Submit any dashboard you think is worthy of being shared with our partners, and with the world. We’ll select the best for payment and amplification through our social and content channels. (Please note that many dashboards submitted to this bounty will not be rewarded with payment — only the best of the best will do here.)
Overview of essay:
In this essay, the Arbitrum network has been investigated through Flipside data. The major aim of this study to explore the provided data on Flipside and find interesting outcomes on Arbitrum blockchain.
To reach the this goal, this essay has been divided into three sections as:
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Live Network analysis
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Sectoral analysis (Dex, DeFi, …)
\
The Outcomes of each sections has been summarized and interesting consequences have been highlighted, accordingly.
This dashboard is Live and Refresh on Daily basis.
What is Arbitrum?
The purpose of creating the Arbitrum network (and other rollups) is to solve the scalability problem of the Ethereum network. Blockchains seek to establish three features: scalability, decentralization and security. The conclusion we reached in the world of digital currencies over the past decade was that it is very difficult (if not impossible) to establish all three of these features in one network. Therefore, each network seeks to solve one of the missing sides in its own way; The base layer of the Ethereum network, which has two features of security and decentralization, is left to solve the problem through roll-ups. The increasing demand for Ethereum network block space has made this network more expensive (gas cost) in recent years. Arbitrum and other layer 2 utilities can greatly reduce the pressure by increasing the capacity of this network. By aggregating transactions and executing them off-chain, Arbitrum ==greatly lowers the cost of each transaction. However, data related to transactions (Data Availability) is recorded in layer one, so for any external observer, the results are reproducible and its accuracy can be ensured.==
How does it work?
Ethbridge is a set of smart contracts on the Ethereum network that is responsible for managing Arbitrum network blocks, arbitrating their validity and managing messages. Arbitrum network validators are working at this level. In the higher layer (AVM), we see the Arbitrum virtual machine, which is fully compatible with evm and can use all software development tools (Hard Hat, Remix, etc.) and development languages (Solidity, Viper, and Yule) of the program for EVM. .
Like any other network, Arbitrum network full nodes exist at this level and provide services to applications and users through API. They run a local version of AVM and process incoming transactions and announce the result. They can also aggregate transactions (batch aggregator). There is a special type of these full nodes with more permissions, which is known as Sequencer; Currently, there is only one moderator on the Arbitrum One network, which is operated by Offchain Labs itself. Sequencers, as their name suggests, can determine the order in which transactions are executed in the block. This arrangement is currently done in a fair manner and in the order of receipt. Also, to avoid censorship, a maximum time for processing transactions has been set (currently 24 hours), which if the arranger refuses to process your transaction, you will end up with Your transaction will run longer. A reasonable way to decentralize the orderers has not yet been devised. Sorters use Chainlink's FSS (Fair Sorting Service) technology to prevent MEV from occurring.
Notable findings:
- The number of newcomers has been decreased since the final days of June due to the bear market on July.
- The overall success rate of transactions on Arbitrum is acceptable and about 94.9 % of transactions are successful.
- The highest percentage of transactions that failed happened on June 19th due to the congestion on network and other reasons.
- The Arbitrum has quite well TPM and maximum TPM occurred on July 28th with 1529 transactions per minute.
- The daily number of transactions and related to it generated fee was high on June 29th due to the highest application of network.
- The numbers shown above demonstrate the updated stats of Arbitrum network and shown the parameters related to it.
Notable findings:
Based on the destinations of transactions, the interaction of Arbitrum users with various program types (sectors) has been displayed in this part:
- The most used program type by Arbitrum users is Layer2 by near 54.7% of usage.
- On June 26th, the application of Layer2 has been increased on Arbitrum and this shown that more users bridged their assets on Arbitrum on that date.
- DEXs are the second most used program types by Arbitrum users and their application has been increased over time.
- The cumulative analysis has been used to reveal the grow rate of sectors on Arbitrum . According to this graph, the Layer2 and DEXs have been dominated the usage of sectors on Arbitrum and their usage have been grown significantly over time.
Application of DEXs:
As mentioned earlier, one of the most used program type on Arbitrum is DEXs. Now, lets dive deep on various programs in this field.
- It can be seen that the Uniswap and Sushiswap are two of the most dominance DEX program on Arbitrum . Next ranks belong to Balancer and Xpollinate ,respectively.
- The usage of DEX programs has been increased over time and reached its highest level on August 8th.
- The cumulative analysis validate the previous statements about application of DEXs on Arbitrum.
Application of Layer 2:
The main concentration of Arbitrum network is on solving Ethereum's shortcomings. For this purpose the application of Layer2 (bridges) should be importantly analyzed.
- From the Layer2 sector point of view, it can be seen that most of the time the highest usage belongs to HOP protocol. After that Multichain came but the domination of HOP is remarkable.
- The highest usage of this filed happened on June 25th as can be seen.
Application of DeFi:
The one of the crucial part of each network and specially Arbitrum is the application of DeFi programs on it.
- The DeFi programs with the most application on Arbitrum are Aave protocol and Cap finance. After them, the Premia stands with share of 8.03% usage.
- From the DeFi programs usage point of view it can be seen that the highest application of these kind programs happened on August 9th.
- The cumulative analysis over time has been revealed the domination of Aave and Cap finance among various DeFi programs on Arbitrum..
Author:
Credited by MZG
Discord handle: m.zamani#0361
Twitter handle: @GargariZamani