Arbitrum: The Evolution from Full-Stack DeFi to RWA Infrastructure

In recent years, Arbitrum has not only continued to scale but has also entered a unique stage of ecological exploration, participating in a game that few can access. This evolution has redefined the boundaries of cryptocurrency technology adoption, from the native stage of Decentralized Finance to the gradual entry of institutions, and finally to the initial emergence of a financial system.

Core Insights

Arbitrum has entered the mature stage of its ecosystem, forming a comprehensive and mature sub-market layout in the Decentralized Finance sector. Currently, it has achieved several key milestones:

• Spot DEX: L2 cumulative trading volume reached $534.2 billion, ranking first.
• Perpetual Contracts: Total trading volume reaches a historic high of $802 billion.
• Lending Service: Liquidity depth exceeds $1.2 billion
• RWA-Fi: Scaled up to a historical peak of $262.5 million, covering 20 assets.

Arbitrum's self-sustainable growth is reflected in three aspects: user growth, liquidity depth, and continuous activity across various business lines.

The Prosperity of Perpetual Contract DEX

In the third quarter of 2021, Arbitrum laid the foundation in the perpetual contract DEX field. Today, user growth has entered a stable and mature phase, with high user retention rates clearly evidenced in the daily trading volume trend:

• Since the third quarter of 2023, the daily trading volume has achieved approximately a 3-fold increase (from $1 billion to $4 billion)
• The cumulative trading volume reached 802.5 billion USD

The perpetual DEX ecosystem has achieved diversified evolution, giving rise to multiple specialized players, such as Rho Protocol (native cryptocurrency interest rate derivatives), Aark Digital (ultra-high leverage trading), and Ostium (diversified asset allocation). The ecosystem demonstrates a trend of high user engagement and simultaneous product innovation.

The Rise of RWA-Fi

As of the third quarter of 2024, Arbitrum's RWA-Fi sector has seen its total locked value grow to a historic peak of $262.7 million. The diverse and growing global fund participants further solidify Arbitrum's position in the enterprise-level tokenized Decentralized Finance space.

It is worth noting that the $EUTBL issued by Spiko Finance holds about 32% of the market share in the European Union government bond tokenization market, surpassing other competitors. This indicates that institutional adoption is no longer just a theoretical stage.

Diversification of the Ecosystem

The Arbitrum sub-ecosystem is showcasing an increasingly diverse range, spanning RWA integration and DeFi native innovations. This fusion meets various needs:

• Institutional allocators seeking compliant revenue-generating assets
• Crypto-native users pursuing permissionless leverage, structured products, or long-tail yield strategies

Arbitrum's Orbit and Stylus have become the core engines for growth across multiple domains, providing the capability to build dedicated chains for vertical scenarios across industries. Currently, the adoption rate of this technological framework is rising rapidly:

• 83 official ecosystem partners
• 41 mainnet online (up 32% since April 2024)
• 21 testnets, 21 in development
• The total locked value of the Arbitrum ecosystem (excluding ArbitrumOne) exceeds 320 million USD.

Institutional Favor and Infrastructure Development

Arbitrum is gaining increasing favor from large institutions, a trend supported by a dual validation of actual application needs and infrastructure layers. Global funds such as BlackRock and Franklin Templeton are building RWA-Fi liquidity, while infrastructure projects like Plume Network are dedicated to bridging real-world capital to the blockchain.

The ultimate issuance network of traditional finance has begun to take shape, with Converge building an institutional-grade settlement layer, and Rayls Labs launching a compliance chain suitable for the banking system. Arbitrum is becoming the preferred infrastructure for real-world institutional deployments.

The Rise of MEV Phenomenon

The surge of the MEV phenomenon marks the ecosystem's transition to the next stage of mature development. Arbitrum's Timeboost auction mechanism introduces an efficient and fair competition model, replicating the proposer-builder separation model of the mainnet. Less than two months after its launch, the usage rate is already quite high:

• 1.42 million DAO revenue (annualized approximately 8.5 million)
• Over 60% of the trading fee revenue comes from Timeboost

Early signs of MEV atomic arbitrage monetization have begun to emerge, primarily concentrated in high-volume trading pairs. The next stage of maturity will be marked by long-tail assets occupying a larger share of MEV flow.

The Timeboost fast lane currently accounts for about 5% of the total transaction volume on Arbitrum and is showing a steady upward trend. Approximately $175 million in daily trading volume comes from MEV arbitrage, accounting for 21.8% of Arbitrum's average daily trading volume over the past month. This indicates that MEV has become a core engine driving substantial trading volume.

Development of InfoFi Applications

Arbitrum embraces the InfoFi narrative through the Yapper leaderboard integrated with Kaito. The project comes with a 3-month incentive of 400,000 $ARB tokens. An innovative form of second-layer InfoFi is taking shape, with Yapyo positioning itself as a decentralized consensus hub, merging social collaboration with incentive design.

Conclusion

Arbitrum has broken through the critical point and is entering a new stage of transitioning from Decentralized Finance to broader on-chain applications. Its maturity depth and evolution dynamics indicate that Arbitrum is forging a unique development path.