GameFi Public Chain Research (Part 2) Layer2 and Optimistic Tracks

Researching GameFi Public Chains Layer2 and Optimistic Approaches (Part 2)

Opening

In the previous article, “Guatian Academy GameFi Public Chain Research Series Part One – Ethereum’s Development and Upgrade Roadmap,” we introduced the development history of Ethereum and the basic information about Ethereum 2.0 upgrade. From there, we discussed two main subcategories in Layer2: Optimistic Rollup and ZK Rollup. If we compare Ethereum to a company, we can simply understand that Ethereum 2.0 upgrade is a reconstruction of the company’s internal management structure, transforming from the original linear structure to a beacon chain-shards structure. Layer2, on the other hand, further outsources the tasks that need to be executed in this overall structure, reducing the burden on the company, improving efficiency, and enhancing overall task processing capabilities.

In this second research article, we will further explore Layer2 solutions and delve into the Optimistic Rollup track.

Overview of Layer2 Solutions

To understand Layer2 scaling solutions, we need to first clarify the concept of Layer2.

What is Layer2? Layer 2 refers to off-chain networks, systems, or technologies built on top of the underlying blockchain (Layer 1) to scale the underlying blockchain network. There are currently two main ways to classify Layer2 in the market: narrow Layer2, which inherits the security of the Ethereum chain and conducts transactions bundled with Layer2 Ethereum (ZK and optimistic rollup are considered orthodox Layer2); and broad Layer2, which includes all Ethereum scaling solutions, mainly including the following five:

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1) Sidechains: A sidechain is an independent blockchain that runs parallel to Ethereum. It locks a certain amount of assets in the main chain’s smart contract and mints the same amount of assets on the sidechain to achieve “atomic swaps.” The biggest problem with sidechain solutions is weak security, but they have good independence and flexibility. The famous Polygon is the representative of Ethereum sidechains. Some people consider the BNB chain as an Ethereum sidechain. Although BNB is also an EVM-compatible chain, strictly speaking, it is more like a replica of Ethereum that can operate independently of Ethereum. However, we will not classify it as a sidechain for now.

2) State Channels: By establishing exclusive payment channels and multi-signature addresses between traders, off-chain transactions can be completed. The final computation result will only be recorded on the chain when settlement is required. State channels are known for their fast speed and low fees. Representative technologies include the Lightning Network (based on Bitcoin) and the Raiden Network (based on Ethereum).

3) Rollups: We have already explained this in previous articles. Rollups “outsource” data execution to Layer2 and submit it to the main chain in batches. They are mainly divided into optimistic rollup and ZK rollup. Optimistic Rollup takes an optimistic approach to the validity of data. If no one questions the data within a specified time and submits fraud proof, the data is considered to be true and accurate. Otherwise, a fraud handling mechanism is activated to revoke the transaction. ZK Rollup, on the other hand, bundles multiple transactions together and publishes them on L1 while simultaneously publishing a proof (using zero-knowledge proof technology) to claim the validity of these transactions.

4) Validium: Validium, like ZK Rollup, uses zero-knowledge proofs. However, unlike ZK Rollup, Validium only uploads the state root and zero-knowledge proof to the main network, while transaction data is stored in Layer2. This allows for higher throughput but sacrifices some security. Because both use zero-knowledge proofs, many people consider Validium to be a variation of ZK Rollup. Therefore, another way to classify them is to divide ZK and optimistic into two categories and place Validium under ZK. ImmutableX, a gaming chain, primarily utilizes the underlying technology of Validium.

5) Plasma: Plasma is a framework for Ethereum Layer2 extension, also known as “chains within chains”. It locks assets on the main chain and transfers transactions to the sub-chain for processing. The sub-chain periodically submits state updates to the main chain. This not only allows for quick settlement but also significantly reduces transaction fees. The difference between sub-chains and side chains is that sub-chains use root storage. If any errors occur, users can safely exit the Plasma chain. Side chains do not have this functionality. In general, sub-chains are more closely linked to the main chain.

In this article, we will focus on discussing the side chain solution Polygon PoS, the two main projects of Optimistic Rollup – Arbitrum and Optimism, and the BNB ecosystem project opBNB and COMBO that are both Ethereum simulators and Optimistic Rollup. We will mainly explain the basic technical principles, ecology, and support for blockchain games of these public chain projects. ZK Rollup and Validium will be introduced in the third article.

Polygon PoS Analysis

Introduction to Polygon

Polygon, formerly known as Matic, was originally a blockchain scalability platform called the “blockchain internet of Ethereum”. As the ecosystem continued to develop, the platform expanded from a single Layer2 solution to a “network of networks,” aiming to address Ethereum’s mainnet transaction speed and scalability issues, with a focus on blockchain games and NFTs. It is not entirely accurate to classify Polygon as a side chain because the overall product matrix of Polygon, with the side chain product Polygon PoS as its core, and the ZK Rollup matrix consisting of Polygon zkEVM, Polygon Miden, Polygon Zero, and Polygon Nightfall, is Polygon’s potential growth point. In the Polygon 2.0 upgrade plan released this year, the team is preparing to upgrade Polygon PoS as a whole to zkEVM Validium. Due to limitations in length and thematic classification, this article mainly analyzes the side chain product Polygon PoS, while the ZK part will be further discussed in the next article.

Technology

Although Polygon PoS is based on Ethereum, it benefits from faster speed and higher scalability. Its transaction volume remains stable at more than twice that of the Ethereum mainnet (about 2 million daily transactions), while gas fees are only 0.1% of Ethereum’s.

Polygon PoS is an EVM (Ethereum Virtual Machine) compatible sidechain that was launched on June 1, 2020 and is currently the main business of Polygon. Polygon PoS is also the most mature Ethereum sidechain solution to date and can be divided into three layers in terms of architecture:

1) Ethereum Layer: This layer consists of a series of Ethereum smart contracts that are responsible for handling processes on the Ethereum network. By using Ethereum as the endpoint, it can make good use of Ethereum’s security as a shield. Matic tokens are also staked in this layer.

2) PoS Checkpoint Layer: This layer is the core layer of Polygon and plays a role in producing and validating Matic sidechain blocks. PoS nodes can listen to events on the Ethereum chain and relay information to the Matic sidechain. They also periodically publish the blocks generated by Matic on the Ethereum chain, thus achieving information synchronization between the Matic sidechain and the Ethereum mainnet.

3) Matic Sidechain Layer: Responsible for transactions, shuffling, block generation, and periodically publishing checkpoints to the node layer.

With its unique hybrid structure, Polygon POS supports the Plasma framework and inherits Ethereum’s security. The PoS Bridge further ensures the security of the chain by using the same group of validators and staked MATIC.

Ecosystem

Since its launch in 2020, Polygon has entered a period of explosive growth in Q2 2021 and has become the third public chain with a complete ecosystem after Ethereum and BNB. By the first quarter of 2023, the Polygon ecosystem has already surpassed 53,000 projects.

Benefiting from the vibrant DeFi stage during the early development of the platform, DeFi projects expanded rapidly. For example, when leading DeFi projects like Uniswap, Aave, and Curve deployed on multiple chains, they chose Polygon as their first destination. In April 2021, Polygon launched a $1.5 million DeFi Development Fund, providing Matic rewards to projects. Although there are some drawbacks in terms of innovation in the DeFi projects within the Polygon ecosystem, it currently ranks fifth in terms of total value locked (TVL) on-chain and has been surpassed by the rising star Arbitrum.

Polygon has also made strategic moves in the NFT space. In June 2021, Opensea became the first NFT marketplace to support Polygon, and since then, Ethereum and Polygon have each targeted different segments of the NFT market. Many international brands have already launched their own NFTs on Polygon, including Starbucks, Mastercard, Adidas, and more. These leading companies have also attracted more brands to join, creating a positive cycle. Other popular projects on Polygon include Lama Kings, Doodle Changs, y00ts, Bungo Beanz, and Super Pengs.

In terms of gaming and metaverse, according to Footprint’s data, there are 468 active gaming projects on the Polygon chain, ranking third after BNB and Ethereum. Specifically, the two leading metaverse projects, Decentraland and The Sandbox, were deployed on the Polygon chain in April and June 2021, respectively. Other popular games include Pixels, Arc8, Benji Bananas, Sunflower Land, Skyweaver, etc.

In July 2021, Polygon announced the establishment of Polygon Studios, focusing on investment in the NFT, gaming, and metaverse sectors. In terms of offline promotion, Polygon has been actively involved. With its low-cost and fast transaction experience, Polygon has become one of the best choices for Web2 and traditional enterprises to explore blockchain or web3.

Pros and Cons Summary

Polygon PoS, as the earliest mature Ethereum Layer2 ecosystem, has significant advantages:

– Speed: Intuitive and efficient bridging, depositing, and withdrawing, with a transaction speed of up to 7000 tps, far surpassing the performance before Ethereum’s upgrade (15 tps);

– Security: Relies on Ethereum and shares its security;

– Compatibility: Complete EVM compatibility means that smart contracts can be directly deployed on the Polygon chain;

– Low cost: Approximately 0.1% of Ethereum’s transaction fees.

With its affordable transaction fees and impressive speed, Polygon has become the top choice for high-frequency trading projects (DeFi, GameFi, etc.) within the Ethereum ecosystem. Although the rise of Layer2 star projects such as Arbitrum, Optimism, zkSync, etc., will to some extent impact Polygon’s market position, Polygon itself is constantly evolving and embracing the ZK track comprehensively, acquiring and launching a series of products based on ZK technology. We will analyze this in detail in the next article.

Polygon PoS entered the market at the right time. In 2020, with the Ethereum network’s congestion and scalability issues being prominent, the market urgently needed a phenomenon-level product in the Ethereum ecosystem to improve its performance. The Rollup track and Ethereum 2.0 upgrade were still under development at that time, and the main competitors in the Layer2 market had not yet formed a strong threat. In addition, Polygon’s market promotion strategy was also very strong. In the early stages of development, it leveraged DeFi and used a subsidy strategy to expand giants like Aave, Curve, Uniswap, and Quickswap, among others. In the gaming and metaverse track, it adopted an investment + incubation strategy for extensive layout, bringing in a significant number of high-quality projects. In terms of ecosystem integration, it has deep cooperation with platforms like ImmutableX and other public chains, sharing the traffic dividends of these platforms. It is believed that with the further improvement of the Polygon ecosystem and the gradual maturity of the Polygon ZK ecosystem, Polygon will experience another wave of significant growth, further consolidating its position in the top tier of public chains.

Analysis of the Arbitrum Project

Introduction to Arbitrum

Arbitrum, as a leading project in Layer2, has always been surrounded by a halo. Especially during the coin launch period in the first half of 2023, it became one of the hottest topics in the chain community, with everyone clamoring to join the Layer2 ecosystem. And from the statistics on Defillama, we can see that Arbitrum has surpassed many public chain competitors, ranking fourth in total TVL after ETH, BSC, and TRON, and even surpassing the well-established Layer2 sidechain, Polygon, exerting a dominant position as the top Layer2 solution.

Arbitrum was launched in May 2021: Arbitrum One officially went live on the Ethereum mainnet. In October 2021, the public testnet of Arbitrum Nova was launched. In 2022, the plan for Arbitrum Orbit is steadily progressing, designed as a Layer 2 solution dedicated to NFT and virtual reality (VR) applications, providing more scalability for digital assets and applications in the virtual world.

Arbitrum currently has a TVL of $5.93 billion, a circulating market cap of $1.45 billion, and an FDV (Fully Diluted Valuation) of $11.3 billion, with no new unlocks in the next six months. The current daily active addresses are around 150,000, with a transfer volume of around 620,000, closely following Polygon and firmly sitting in the top tier.

Technology

Arbitrum is a Layer 2 scalability solution that follows a similar route as the Optimistic Rollup technology. It assumes all transaction verifications are honest but sets a challenge period during which anyone can raise a challenge. The system introduces two different roles to ensure transaction execution: Verifiers and Managers. Verifiers are responsible for processing transactions and receive Ethereum as a reward, while Managers monitor whether Verifiers execute transactions correctly. Before a transaction returns to the Ethereum mainnet, there is a 7-day challenge period during which all Managers can raise challenges. If the transaction is ultimately confirmed to be problematic, the malicious actor will lose the staked tokens. This ensures the security of Arbitrum as long as there is at least one honest Manager during the challenge period.

The project mainly includes the following major product lines:

1) Arbitrum One: Based on Optimistic Rollup technology, Arbitrum One verifies transactions on the Ethereum chain to achieve high-performance and low-cost smart contract execution. Arbitrum One provides a fast and affordable way to execute Ethereum smart contracts, alleviating congestion issues on the Ethereum network and boosting performance in DeFi applications and the NFT market. Most applications (such as DeFi and NFT) are deployed on the flagship rollup platform, Arbitrum One.

2) Arbitrum Nova: Arbitrum Nova uses zk-Rollup technology to verify transactions using zero-knowledge proofs, improving security and efficiency. The introduction of Arbitrum Nova adds diversity to Arbitrum, allowing developers to choose different solutions to build applications that meet the needs of different projects. Arbitrum Nova is mainly used for high throughput applications, such as gaming and social apps.

3) Arbitrum Orbit: Arbitrum Orbit is the ecosystem development plan for Arbitrum, aiming to provide tools, libraries, and support to facilitate developers in building applications on Arbitrum. The goal of Arbitrum Orbit is to expand the Arbitrum ecosystem, provide resources and support for developers, and promote the building and deployment of applications.

These three components together drive the development of Arbitrum, providing more technical choices and ecosystem support, attracting more developers and projects, and further driving the growth of the Ethereum ecosystem.

Ecosystem

Arbitrum’s ecosystem has reached 600 projects, with numerous excellent ecosystem projects, such as GMX, Radiant, TreasureDAO, Camelot, etc., bringing a multitude of use cases to Arbitrum. Among them, game projects like Treasure DAO and Pirate Nation have experienced explosive growth in data, bringing tremendous activity to Arbitrum.

Pros and Cons Summary

Arbitrum inherits the advantages of Optimistic Rollup, and has the following strengths:

– High performance: Arbitrum improves transaction throughput, reduces costs, and alleviates Ethereum network congestion issues by optimizing smart contract execution.

– Low cost: By executing transactions on Layer 2, Arbitrum significantly reduces gas fees on the Ethereum main chain, reducing the cost of participating in activities such as DeFi and NFT markets for users.

– Compatibility: Arbitrum is compatible with Ethereum smart contracts, supporting the migration of existing dApps and smart contracts.

– Security: Arbitrum adopts Layer 2 scaling security measures, such as Rollup technology, to ensure the security of user funds and data.

– Ecosystem support: Attracting well-known projects within the Ethereum ecosystem, providing users with more choices, and offering growth opportunities for DeFi and NFT projects.

Arbitrum also has the following disadvantages:

– Centralization: Compared to the Ethereum main chain, Layer 2 solutions often have a higher degree of centralization, which may raise some security and trust issues.

– Learning curve: New users may need to learn new workflows and methods, adding to their learning curve. For example, transferring ETH mainnet assets to the Arbitrum Layer 2 network through bridging is required.

– Low network effect: Time is needed to establish sufficient network effects and attract more users and developers.

In summary, Arbitrum has significant advantages in providing high performance, low cost, and compatibility. However, it still needs to address challenges related to centralization and network effects. In the future, with further development and adoption of Layer 2 technology, Arbitrum is expected to improve the scalability and user experience of the Ethereum ecosystem.

Optimism Project Analysis

Introduction to Optimism

Optimism is Ethereum’s Layer 2 solution that moves transfers, smart contracts, and more to the Optimism chain, recording only the final results on Ethereum, significantly reducing transaction fees.

The Optimism project was launched in early 2020 and released a whitepaper. In late 2020, it launched a testnet to validate the feasibility and security of its technology. Developers and projects can now start deploying smart contracts and applications on Optimistic Ethereum. In 2021, Optimism actively collaborated with the Ethereum community to promote the development of Layer 2 solutions. Ethereum recognized the urgent need for scalability, and Optimism offered a viable choice. The Optimism mainnet was officially launched in late 2021, marking the introduction of the first mainstream Layer 2 scalability solution on Ethereum. Since then, some DeFi projects and decentralized exchanges have started migrating to Optimistic Ethereum to lower transaction costs and improve performance. Since its mainnet launch, Optimism has gained widespread adoption and attracted numerous projects to deploy applications, including DeFi projects, NFT marketplaces, and other applications within the Ethereum ecosystem.

The development of Optimism demonstrates its important role in addressing Ethereum network congestion and high transaction fees, as well as its continuous growth and adoption within the Ethereum ecosystem. It represents a significant advancement in Layer 2 scalability technology in the blockchain field.

Technology

When discussing the technology of Optimism, we must mention the OP Stack. OP Stack can be understood as a set of open-source software components that allow anyone to build their own L2 blockchain on Ethereum using Optimistic Rollup. OP Stack consists of four main components:

– Mainnet: OP Mainnet is a low-cost and fast Ethereum L2 network compatible with the Ethereum Virtual Machine (EVM).

– Contracts: These are the smart contracts that implement the core logic and functionalities of the OP Stack. They include the State Transition System (STS), Fraud Proofs (FP), State Commitment Chain (SCC), and Canonical Transaction Chain (CTC).

– Services: These provide data availability, synchrony, and communication between L1 and L2.

– Tools: These facilitate the development, testing, deployment, monitoring, and debugging of OP Stack-based blockchains.

OP Stack is being built as a forkable, modular, and scalable blockchain infrastructure. To achieve this vision, all types of L2 need to be integrated into a single Superchain, merging separate L2s into an interoperable composite system. Deploying L2 will be as simple as deploying a smart contract on Ethereum today, transforming the narrative from “one-click token issuance” to “one-click chain issuance.” Essentially, the Superchain is a horizontally scalable blockchain network that shares Ethereum’s security, communication layer, and development tools. It can be compared to Cosmos based on Ethereum security, but now OP Stack has become the Cosmos Killer. Benefiting from the OP Stack or Superchain framework, Optimism, Base, Zora, Aevo, and the Public Goods Network, a total of five public chain projects, have already gone live, with opBNB recently joining the lineup.

From an architectural perspective, the OP Stack can be divided into six layers from bottom to top: the DA Layer (Data Availability Layer), Sequencing Layer, Derivation Layer, Execution Layer, Settlement Layer, and Governance Layer. Each layer of the OP Stack is a modular API that can be combined and decoupled as desired. The most critical layers are the DA Layer, Execution Layer, and Settlement Layer, as they form the main workflow of the OP Stack.

1) DA Layer: The Data Availability Layer is the source of raw data for the OP Stack, and it can use one or multiple data availability modules to obtain input data. Currently, the main DA Layer is Ethereum, but more chains will be added in the future.

2) Execution Layer: This layer is the state structure in the OP Stack, providing possibilities for EVM or other VMs. It adds support for L2 transactions initiated on Ethereum and increases the additional L1 data cost per transaction in the overall cost of publishing transactions to Ethereum.

3) Settlement Layer: This layer collects L2 transaction data on the OP Stack and sends the information to the target chain for settlement after L2 confirmation. In the future, it is also expected to have access to ZK and other validity proof mechanisms to bridge the gap between different chains and even connect OP system L2 and ZK system L2.

Ecosystem

DeFi is always the highlight of public chains. The prosperity and innovation of DeFi projects attract and accommodate a large amount of liquidity, just like injecting fuel into an engine, invigorating the entire public chain ecosystem. OP’s DeFi ecosystem is relatively complete, with decentralized exchanges, lending platforms, and more. For example, Velodrome is the largest DEX on OP, and Sonne Finance is the native lending platform on OP, with the second-largest Total Value Locked (TVL) in the lending projects.

In the GameFi field, unfortunately, there are no remarkable projects on OP’s side. We don’t have something like Treasure DAO, a “chain game Nintendo,” or innovative projects like Trident’s Risk to Earn. However, OP does have a trump card in the gaming sector, which is Op Craft based on Op Stack. Full-chain games are a new paradigm. When it comes to pure on-chain games, you would think of “dark forest” first. Expanding the concept of pure on-chain games, a popular term now is Onchain Autonomous World, which may be the playstyle that best fits the characteristics of blockchain. Op Craft pioneered this trendy term.

Summary of Pros and Cons

Optimism has four major advantages: EVM equivalency, data security, speed, and cost.

l Optimism is one of the most EVM-compatible chains, with a focus on going a step further and being EVM-equivalent. Optimism can use its Optimistic Virtual Machine (OVM) to support any Ethereum application, which is a compatible virtual machine with EVM. Developers can deploy any Ethereum-based dApp on Optimism with minimal architectural changes. This allows for seamless integration of decentralized applications (dApps) built on Ethereum into Optimism.

The Optimism rollup architecture allows for security from the Ethereum mainnet. Transactions are processed on Optimism, but the transaction data is written to and stored on Ethereum. This allows Optimism to inherit the security of Ethereum while maintaining scalability.

Optimism is able to achieve 10-100 times scalability improvement depending on the nature of the transactions. It has almost instant transaction finality, allowing users to check their transaction results almost immediately.

Transactions on Optimism are also cheap, costing only about 1% of Ethereum transaction costs.

Optimism has three main drawbacks: long and expensive withdrawal times, potential misalignment of incentives among network participants, and underlying L1 scrutiny of transactions.

Due to the 1-week challenged period for fraud proofs, withdrawals through the official Optimism bridge require a 1-week waiting period. This is an important point to note when using the network, as withdrawals through the main bridge cannot be canceled once submitted. Due to the security measures implemented in the bridge, withdrawals through the main bridge can be expensive, potentially costing over $100. Such a long and costly withdrawal period can have negative effects on adoption and composability.

The network relies on incentivized validators to challenge fraudulent proposals. If there are fewer or no fraudulent proposals, validators receive fewer or no rewards from operating nodes because they only receive rewards when successfully challenging fraudulent proposals. This can discourage validators from operating nodes.

If a specific transaction has enough value, the Sequencer may bribe Ethereum miners to allow fraudulent proposals to pass during the computational check at a very low cost.

opBNB and COMBO Project Analysis

opBNB

opBNB is a Layer 2 network on BSC built using OP Stack technology. Similar to Ethereum’s Optimism Rollup, opBNB calculates off-chain transaction data and packages it, and then submits it to Layer 1 to improve network performance, ultimately achieving high TPS, low gas fees, and the same level of security as Layer 1.

In 2020, amidst Ethereum network congestion, the launch of BSC provided users and developers with a fast, secure, and low-cost decentralized application environment. However, with the surge in transaction volume, such as in the GameFi sector, BSC also faces network congestion and high gas fees at times. The existing design and architecture are no longer sufficient to meet scalability demands. In this context, opBNB emerged to provide new possibilities for solving BSC’s scalability issues.

The open-source nature of the OP Stack allows developers to easily utilize OP components to develop Layer 2 public chains, similar to Coinbase’s Base which is also based on OP Stack. The difference is that Base is an Ethereum L2, while opBNB is a BSC L2. BNB chose OP over ZK primarily for the practicality of OP. It is easy to get started with, highly customizable, and truly achieves EVM compatibility, enabling quick implementation in application development and user adoption, whereas ZK has a larger narrative and higher development difficulty.

Compared to Ethereum, BSC can be considered “fast,” and opBNB is even faster. opBNB will raise the gas limit to an astonishing 100M, exceeding Optimism’s 30MGas limit, processing 4000+ transactions per second, with an average transaction cost of less than $0.005.

COMBO

Unlike the three public chain projects mentioned earlier, COMBO is a Layer 2 network focused on Web3 games. It opened its testnet in April this year. Similar to opBNB, COMBO, based on BNB Chain, adopts Optimistic Rollup Layer 2 technology, achieving a speed of 5,000 TPS, with gas fees as low as 0.001Gwei.

For the convenience of game developers, COMBO has a cooperative relationship with many infrastructure projects, providing COMBO with comprehensive on-chain development tools, including:

l Full-stack development toolkit: A comprehensive set of tools and resources for game developers, covering front-end and back-end development, including frameworks, libraries, documentation, testing tools, etc.;

l ComboUp: Provides developers with an environment that is always available to launch games and applications, and provides templates, modules, and infrastructure to accelerate the development and deployment process;

l Web3 game solutions and ecosystem: Provides functions such as asset ownership, decentralized marketplace, and interoperability with other blockchain-based games, and brings together developers and players to build a complete game ecosystem;

COMBO’s ecosystem layout revolves around the game and metaverse tracks, from underlying infrastructure, network, security, to wallets, data, NFT markets, and basic applications. It also has support from heavyweight metaverse projects such as Lifeform, Ultiverse, and SecondLive. Although not massive, it is comprehensive.

Backed by the large BNB ecosystem, opBNB has inherent advantages and can smoothly connect with BNB ecosystem projects. DeFi projects include the derivative trading platform OpenOcean, recent hot projects like Goose Finance and BabySwap, and the cross-chain bridge Orbit Bridge; GameFi projects include soccer game Ultimate Champions, NFT Farmer for the metaverse game Mobox, and upcoming project Cards Ahoy, and more.

The project has raised a total of $40 million in funding, with Binance leading with $12 million. In June this year, the COMBO team allocated $80 million to the ecosystem fund to support developers creating Web3 games on COMBO, providing them with advisory and game industry resources to assist in the Web3 game development process. For COMBO ecosystem projects, there is also an opportunity to receive $100,000 in COMBO tokens through Grants, as well as further strategic investments.

When it comes to BNB and Optimistic Rollup, COMBO is similar to what Immutable is to ETH and ZK Rollup. Both are game-specific chains, backed by the large ecosystems of BNB and ETH, respectively, and they both adopt the two most mainstream layer 2 technologies. Both platforms have strong gaming/metaverse products, with Gods Unchained being the game for Immutable and SecondLive for COMBO. With the influence and topicality of the metaverse track of SecondLive, the support of the deep-rooted game and metaverse track by Binance, and its own efforts in the metaverse and gaming space, I believe the COMBO ecosystem will also be able to ride the wave of growth in the gaming and metaverse tracks.

Summary

In this in-depth research article, we have explored Layer2 and mainly analyzed Polygon PoS based on the OP track, Arbitrum and Optimism based on Optimistic Rollup, and opBNB and COMBO, which are also based on Optimistic Rollup but within the BNB ecosystem.

Overall, Rollup is the mainstream solution in the Layer2 space, offering significant improvements and enhancements in security, speed, scalability, and fees compared to the original Layer1 mainnet. Of course, the Rollup solution also has some existing problems, such as withdrawal delays caused by the OP challenge period, low interoperability due to cross-chain bridges, limited supported asset types, fragmented asset liquidity, and centralized sequencers, among others. In addition, there are concerns about possible security vulnerabilities and risks in the Rollup technology itself, which are also points of concern for many users. How to address these issues, reduce the impact of the OP withdrawal waiting period, enhance capital efficiency and security, and achieve decentralized sequencers will be areas that need continuous improvement in the OP track.

Among the 5 Layer2 public chain projects introduced in this article, 3 are within the Ethereum ecosystem and 2 are within the BNB ecosystem; 1 is sidechain technology (Polygon PoS) and 4 are OP architectures. It can be said that these 5 projects are the pearls of the Layer2 and OP tracks, bearing the responsibility of ecosystem development. Of course, there are other layer 2 public chains based on OP technology, such as Metis, Boba, Mantle, etc., which are also pillars of the current OP ecosystem, but due to space limitations, further analysis cannot be conducted in this article.

In the final section, because people often compare Optimism and Arbitrum, let’s also talk about the technical and non-technical differences between the two.

From a technical perspective, the main difference lies in the way disputes are resolved. When Optimism encounters a challenge, it relies on the Ethereum EVM for execution, while Arbitrum uses an off-chain dispute resolution process that reduces disputes to a step in a single transaction and then sends the result to the EVM for final validation. Therefore, in terms of dispute resolution process, Optimism will be simpler than Arbitrum and will also have certain advantages in terms of speed and fees.

From a market perspective, Arbitrum and Optimism have similar transaction data and performance, both at a similar level, with Arbitrum possibly slightly ahead; their market valuations are also quite close, with market caps of $1.36 billion and $1.32 billion, respectively. In terms of market strategy, Optimism follows a horizontal expansion model of the OP Stack, attracting more developers to launch layer 2 public chains on the platform and leveraging strong B-side resources to drive the participation of major ecosystems such as Binance and Coinbase. On the other hand, Arbitrum has chosen a vertical ecosystem layout based on the Arbitrum Orbit framework, and is actively exploring the Layer3 track, launching XAI Games to achieve higher performance.

Now let’s take a look at the GameFi field. The ecosystem of Arbitrum is currently ahead of Optimism. Although Optimism has OP Craft, it doesn’t compare to the popularity of Arbitrum’s TreasureDao in terms of the level of excitement. Furthermore, Optimism’s exclusive support for GameFi is not as good as Arbitrum Nova, the high-frequency interactive exclusive chain, and XAI, the Layer3 game exclusive chain.

Overall, the Arbitrum and Optimism projects have their own unique characteristics and focuses in terms of technology and market aspects. As the competition intensifies in the Layer2 race, it is believed that all public chains will continuously bring higher performance, more comprehensive ecosystems, and better user experiences based on their respective strengths. In the next article, we will focus on exploring several Layer2 public chains in the ZK and Validium tracks to analyze the overall development of the ZK track. Stay tuned!

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