Arbitrum's Expansion Strategy and Market Share Objective

Arbitrum is leading the layer 2 market, recording unparalleled performance in various metrics compared to other rollups, including TVL and daily transaction volume. Additionally, the recent implementation of #EIP4844 has led to a reduction in gas fees, while the development of its own technology stack with Orbit and Stylus, along with grant programs like STIP and GCP, demonstrates Arbitrum's continuous effort to expand its ecosystem.

This report aims to explore the background and evidence supporting the expectation that Arbitrum will solidify its unique position in the rollup market.🧵

2/ Arbitrum, a leader in rollup ecosystem
1️⃣ xa0Arbitrum holds more than 42% of the total TVL across all rollups, marking it as the first place.
2️⃣ xa0The number of dApps onboarded to the network has reached 560, marking it as the first place.
3️⃣ xa0From September 2023 to January 2024, Arbitrum has seen a continuous increase in onchain revenue for four months.

3/ Gas Fee Reduction with the Implementation of EIP-4844⬇️
The essence of EIP-4844 lies in introducing a new type of data called "blobs" that are stored only in the Ethereum consensus layer. The goal is to reduce rollup gas fees and ultimately increase the scalability of Ethereum layer 2.
With the introduction of blobs, one of the components of Arbitrum's transaction fees, the cost of submitting data to the mainnet (L1 cost), has significantly decreased. Consequently, Arbitrum's average gas fee has dropped to a very low level of $0.01, which is about 20 times lower than before.
However, due to the potential for increases in contract execution costs caused by a surge in transaction request, and fluctuations in L1 costs due to increased demand for blobs, it's necessary to assess whether the current level of gas fee reduction can be maintained in the long term.

4/ Expanding the ecosystem through technical upgrade
1️⃣ Arbitrum Orbit: A permissionless service that allows users to create layer 2 or layer 3 as desired, offering developers who want to build their own chain a high degree of autonomy and composability.
2️⃣ Arbitrum Stylus: An upgrade that adds WASM VM to the existing EVM, enabling the deployment of contracts written in various languages including Rust, C, and C++, in addition to Solidity on Arbitrum.
Arbitrum is striving to easily integrate more projects and developers into its ecosystem through both vertical expansion with Orbit and horizontal expansion with Stylus.

5/ Expanding the ecosystem through grants
1️⃣ xa0STIP: a grant support program that distributes a total of 50 million ARB to 30 projects selected through community vote. The goal is to provide a foundation for each project to design incentive structures that can attract users and capital and maintain them continuously.
2️⃣ xa0LTIPP: This 12-week test program operates between STIP and LTIP, involving a total of 45 million ARB. It aims to address the issues found in STIP and enhance the outcomes of future grant programs.
3️⃣ xa0GCP: Gaming Catalyze Program is dedicated to expanding the Arbitrum gaming ecosystem, with 200 million ARB allocated. The objective is to secure over 20% market share among the entire gaming projects for Arbitrum.

6/ The full report of “Arbitrumxa0—xa0Strengthening Its Position As a Leader in Layer 2” written by a DeSpread Researcher @Touslesjours_70 can be accessed from the link below ⤵️
https://research.despread.io/reports-arbitrum