Layer 2 with Orbiter Finance: Better Ethereum, better summer
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Do you remember last summer? It was a good time for DeFi.
DeFi has been mentioned all the time since the MakerDao, but it has never been to the center stage of the blockchain. It wasn’t until the large-scale liquidation on March 12th last year that people began to realize DeFi had a certain amount of money. And the portfolio of DeFi could become even richer.
DeFi has passed this extreme test. It make DeFi move from the edge to the center. The scale of capital began to tilt to DeFi, and it was Compound that added weight to the scale.
In May, Compound started distributing some tokens to users through yield farming. This innovation took COMP to the moon. Balancer and Aave have since jumped on the “yield farming” train, and market cap of these projects have exploded. Suddenly, DeFi became the “gold” of the blockchain world, and more and more people joined it. Then DeFi Summer officially began.
People are beginning to realize charm of DeFi. Different protocols can be combined in a variety of ways with smart contracts. One thing supports the other, combines with another, and interacts with the other to provide specific financial services.
In July, YFI was launched, and we all knew the rest of the story, YFI took DeFi to the extreme. The legendary story from worthless to ten thousand times of currency completely started the DeFi summer.
So DeFi summer ushered in the climax, DeFi is no longer niche things, more and more capital moves between different DeFi. We enjoy the process, and discover a new and unique DeFi protocol has become our fun. Assets like a truck, moves between the protocols, brings us new goods. And move on to the next site to start digging again.
Behind the prosperity, there are still some problems. The problem of gas fee that has plagued Ethereum for a long time is highlighted again. The cost is getting higher, and the time of transferring assets becomes longer. If the transfer of assets is not smooth, then the DeFi ecosystem doesn’t work well.
DeFi summer quietly left in a hustle and bustle. Although it is no longer prosperous, it is still thriving, and this summer is a kind of wealth for us. It is like a prosperous city, where residents have left after experiencing changes, but the city’s planning and construction are still in the city, and there are still a steady stream of people yearning for this city.
Back to the present. After a year, both Ethereum and DeFi have made new developments. Ethereum scaling has been solved well, and using rollups solution of Layer 2 gives DeFi new hope. With the launch of Arbitrum’s mainnet and zkSync, more and more DeFi projects are also starting to deploy on Layer 2, hoping to start building a new Lego world on faster Ethereum.
“DeFi summer is back,” people said.
Even though there is a lot of praise for Layer 2 on the Internet, there are still some people who are aware of the problem. One of them is Vitalik, the founder of Ethereum. He pointed out that there is a serious problem with Layer 2 at the beginning: There is no way to transfer assets across the rollups directly in Layer 2, but through Layer 1.
However, whether it is ZK or OP, returning from L2 to L1 is not real-time. This is fatal to DeFi because DeFi’s diverse portfolio of protocols is based on the smooth transfer of assets. If this link is not resolved, DeFi will go back to the days before last summer when different protocols were going it alone.
This summer is not as optimistic as expected, Layer 2 is like an island, there are a lot of beach on the island. And each beach hold its own unique activities, and as a tourist I want to participate in all of them, but I found there is no road between beaches, I could only look at the other lively beach from afar and wait for 7 days. After 7 days, everything is over. I am not able to participate in any beach activities. This is not the summer we expected.
When my team and I realized the seriousness of the problem, we immediately started thinking about solutions. We already had several prototypes of the solution. When we were hesitating which one to choose, Vitalik pointed us the way in Ethresearch’s post: Cross-rollups DEX with smart contracts only on the destination side.
We immediately stopped mining and started developing this protocol, because we believed that the protocol would be the infrastructure in the Layer 2 environment, the future of Ethereum. So Orbiter Finance was born.
Orbiter Finance builds a decentralized bridge protocol between rollups that allows cross-rollups direct transfers in one block time (~13s), with each transfer requiring only one smart contract validation on the destination rollups.
If a user wants to transfer his or her 1000USDT from rollups A to rollups B, he or she only has to make one transaction on rollups A with the Orbiter Market maker, and the user’s wallet on rollups B will receive 1000USDT. We won’t miss any interesting “beach activities” on the rollups B anymore.
Orbiter Finance will fill in the gap where there is no bridge between rollups. With the help of Orbiter, Layer 2 will be much like the DeFi environment we are familiar with. Portfolio between collaboration is done automatically by smart contracts.
Orbiter Finance brought collaboration to the isolated rollups. It makes the ecology of Ethereum more complete and makes this summer a better one.
Written by Tommy@Orbiter Finance
