Author: Haotian
A brief interpretation of the news about @RobinhoodApp's plan to build a Layer 2 on Arbitrum:
1) From a technical perspective, Robinhood's decision to side with Arbitrum's Nitro is no different from Coinbase's initial support for Optimism's OP Stack. However, Base's performance has already proven a rule: the success of a technology stack does not equal the success of the parent chain.
The rise of Base is more a result of Coinbase's brand effect + compliance resources + user traffic. To some extent, it also provides some guidance for Robinhood to settle in Arbitrum.
This means that, in the short term, it cannot prove that the price of $ARB is undervalued (compared to the performance of $OP). However, in the long run, once Robinhood's target scenario of "on-chain US stocks" is successful, it may change the awkward situation of the original Layer 2 as an Ethereum Layer 1 scaling solution with "technology but no implementation." It will open up an unprecedented Mass Adoption path for both the Ethereum ecosystem L1+L2.
2) Coinbase's Layer 2 is more of a general-purpose Layer 2 solution, mainly following the past transaction-oriented scenarios such as DeFi, GameFi, and MEME. Robinhood's approach this time may be different, taking the direction of a specialized Layer 2, specifically customizing a set of matching on-chain infrastructure for traditional finance?
Although OP-Rollup's transaction confirmation time can also reach sub-second levels, the security of such transactions is still within the scope of the 7-day fraud verification of optimistic Rollup. Robinhood's new Layer 2 needs to handle stock T+0 settlement, real-time risk control, compliance requirements, and other characteristics, which may require in-depth customization of the Layer 2's virtual machine layer, consensus mechanism, and data structure to completely squeeze out the potential of the Layer 2 scaling solution.
3) Arbitrum's technical solution is more mature than Optmism's: Nitro's WASM architecture has higher execution efficiency and a natural advantage in processing complex financial calculations; Stylus supports multi-language development of high-performance contracts, which can carry some heavy computing tasks of traditional finance; BoLD solves malicious delay attacks and consolidates the security of optimistic verification; Orbit supports customized Layer 3 deployment and provides sufficient flexibility to develop features.
You see, there must be a reason why Arbitrum was chosen. Its technical advantages seem to fit the harsh "customization" requirements of traditional finance for infrastructure, unlike OP Stack, which only needs to be able to run. This also makes sense, because in the face of the ultimate challenge of carrying trillion-dollar TradFi businesses, the maturity and specialization of technology will determine success or failure.
4) On-chain US stocks and crypto-stock exchanges are no longer the "token issuance narratives and games" commonly used in the traditional crypto space. What they face is not only "speculative users" who completely disregard whether project products are delivered or whether the experience is smooth for the sake of speculating on tokens. Once the network experiences gas fluctuations that cause congestion and transaction delays, it will be absolutely intolerable for users familiar with traditional financial product lines.
These traditional financial users are familiar with the smooth experience of millisecond-level response, 7×24 hour uninterrupted service, and T+0 seamless settlement. More importantly, behind them are often institutional funds, algorithmic trading, and high-frequency strategies, which have abnormal requirements for system stability and performance. This means that the user base that Robinhood Layer 2 will serve will be completely different, and the challenge is very difficult.
The above.
In short, Robinhood's layout in Layer 2 will be of great significance. It is not just that the Layer 2 technology stack has another new player, but a hardcore experiment to verify whether Crypto infrastructure can undertake the core business of the modern financial system.
Once the experiment is successful, the digital restructuring of the entire trillion-dollar TradFi market, including bonds, futures, insurance, and real estate, will accelerate. Of course, in the long run, it will directly benefit the application scenario implementation of the entire Ethereum L1+L2 ecosystem technology infrastructure, and will also redefine the value capture logic of Layer 2.
Author: Haotian
A brief interpretation of the news about @RobinhoodApp's plan to build a Layer 2 on Arbitrum:
1) From a technical perspective, Robinhood's decision to side with Arbitrum's Nitro is no different from Coinbase's initial support for Optimism's OP Stack. However, Base's performance has already proven a rule: the success of a technology stack does not equal the success of the parent chain.
The rise of Base is more a result of Coinbase's brand effect + compliance resources + user traffic. To some extent, it also provides some guidance for Robinhood to settle in Arbitrum.
This means that, in the short term, it cannot prove that the price of $ARB is undervalued (compared to the performance of $OP). However, in the long run, once Robinhood's target scenario of "on-chain US stocks" is successful, it may change the awkward situation of the original Layer 2 as an Ethereum Layer 1 scaling solution with "technology but no implementation." It will open up an unprecedented Mass Adoption path for both the Ethereum ecosystem L1+L2.
2) Coinbase's Layer 2 is more of a general-purpose Layer 2 solution, mainly following the past transaction-oriented scenarios such as DeFi, GameFi, and MEME. Robinhood's approach this time may be different, taking the direction of a specialized Layer 2, specifically customizing a set of matching on-chain infrastructure for traditional finance?
Although OP-Rollup's transaction confirmation time can also reach sub-second levels, the security of such transactions is still within the scope of the 7-day fraud verification of optimistic Rollup. Robinhood's new Layer 2 needs to handle stock T+0 settlement, real-time risk control, compliance requirements, and other characteristics, which may require in-depth customization of the Layer 2's virtual machine layer, consensus mechanism, and data structure to completely squeeze out the potential of the Layer 2 scaling solution.
3) Arbitrum's technical solution is more mature than Optmism's: Nitro's WASM architecture has higher execution efficiency and a natural advantage in processing complex financial calculations; Stylus supports multi-language development of high-performance contracts, which can carry some heavy computing tasks of traditional finance; BoLD solves malicious delay attacks and consolidates the security of optimistic verification; Orbit supports customized Layer 3 deployment and provides sufficient flexibility to develop features.
You see, there must be a reason why Arbitrum was chosen. Its technical advantages seem to fit the harsh "customization" requirements of traditional finance for infrastructure, unlike OP Stack, which only needs to be able to run. This also makes sense, because in the face of the ultimate challenge of carrying trillion-dollar TradFi businesses, the maturity and specialization of technology will determine success or failure.
4) On-chain US stocks and crypto-stock exchanges are no longer the "token issuance narratives and games" commonly used in the traditional crypto space. What they face is not only "speculative users" who completely disregard whether project products are delivered or whether the experience is smooth for the sake of speculating on tokens. Once the network experiences gas fluctuations that cause congestion and transaction delays, it will be absolutely intolerable for users familiar with traditional financial product lines.
These traditional financial users are familiar with the smooth experience of millisecond-level response, 7×24 hour uninterrupted service, and T+0 seamless settlement. More importantly, behind them are often institutional funds, algorithmic trading, and high-frequency strategies, which have abnormal requirements for system stability and performance. This means that the user base that Robinhood Layer 2 will serve will be completely different, and the challenge is very difficult.
The above.
In short, Robinhood's layout in Layer 2 will be of great significance. It is not just that the Layer 2 technology stack has another new player, but a hardcore experiment to verify whether Crypto infrastructure can undertake the core business of the modern financial system.
Once the experiment is successful, the digital restructuring of the entire trillion-dollar TradFi market, including bonds, futures, insurance, and real estate, will accelerate. Of course, in the long run, it will directly benefit the application scenario implementation of the entire Ethereum L1+L2 ecosystem technology infrastructure, and will also redefine the value capture logic of Layer 2.
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