The selection of the underlying blockchain technology plays a pivotal role. In this regard we have considered the use of various promising blockchain options, but Arbitrum and Base have shown specific promise to bitgrit from an EVM perspective.
In future, bitgrit intend to launch BGR and COMPX on the Cardano ecosystem, and eventually running a dual blockchain ecosystem (EVM and Cardano).
Layer 2 Options
Both Arbitrum and Base have prominent security features, primarily due to their integration with Ethereum's established ecosystem. As they are Optimistic Rollup Layer 2 scaling solutions, they inherit the solid security reputation of Ethereum, along with its Proof-of-Stake (PoS) consensus mechanism.
The Optimistic Rollups technology aggregates multiple off-chain layer 2 transactions into a single on-chain data representation on Ethereum. This inheritance implies a strong track record of decentralization and immutability, which are fundamental to security in the blockchain world.
Cost Effectiveness / Scalability
The value proposition of Arbitrum and Base lies in cost-effective transactions and scalability. As Layer 2 solutions on Ethereum, it significantly reduces transaction costs by offloading a substantial portion of transaction processing from the Ethereum mainnet, given its roll up feature previously mentioned. The reduction in gas fees make it an attractive choice for users and developers looking to minimize costs.
Scalability is achieved through this Layer 2 approach, as it allows Ethereum to handle a higher transaction throughput without compromising on security. This aligns with the growing AI market and its daunting demands, which in turn will spurn demand for BGR.
Arbitrum and Base operate as a Layer 2 scaling solution on the Ethereum network, benefiting from Ethereum's established decentralization.
Chain ownership of Arbitrum One and Arbitrum Nova sits within the control of the Arbitrum governance system. The Arbitrum Decentralized Autonomous Organization (DAO), made up of $ARB token-holders and delegates, carries out Arbitrum operations through governance votes. The DAO controls the validator allow-list, which expands regularly to increase decentralization.
In the case of Base, it is governed by Coinbase making it quite centralized from a governance perspective, however Base aims to become completely decentralized and permissionless.
Arbitrum and Base enjoy a substantial advantage in terms of onboarding users due to its association with Ethereum. They tap into Ethereum's extensive existing user base and ecosystem. The Ethereum community includes developers, users, and a plethora of decentralized applications (dApps), which can potentially be leveraged to bolster our platform's user base.
For Arbitrum, it has proven it has built a solid active community, currently with 13.8 million unique wallets with daily transactions of approximately 500,000 per day and a TVL of USD 1.8 billion. There are over 470 DeFi protocols on this platform with approximately 126k+ daily active users.
For Base, with direct access to the Coinbase ecosystem, consisting of 110m verified users and USD80+ billion in assets, this could immensely benefit bitgrit as Coinbase users migrate to actively utilize Base. Currently Base has approximately 165 active protocols with 60k daily active users with a TVL of USD 294.54 million. If only 10% of Coinbase’s verified users migrate to Base, there would be 11m users on Base.