Offchain Labs

Trader Joe takes its first step into the Ethereum ecosystem

Despite the new multichain vision, the Trader Joe team confirmed that its “true home” and “top priority for all growth efforts” will continue to be on Avalanche.

Decentralized finance (DeFi) protocol Trader Joe has announced its very first expansion from Avalanche and onto the Ethereum ecosystem as part of its plans to access new markets and drive up user activity.

The decentralized trading platform announced its “multi-chain” expansion into Ethereum layer-2 scaling solution Arbitrum One on Dec. 1 and follows around a month after it stated its intention to expand to additional markets and ink new partnerships amid falling TVL and user activity in the third quarter.

The team stated that they’re working closely with Offchain Labs — the team behind Arbitrum One — to launch a testnet “within the coming days,” before officially deploying it onto the Arbitrum One mainnet in January 2023:

“Deployment to Arbitrum One is the next step in this global expansion effort and we look forward to introducing the innovative AMM built on Avalanche, and also working with new partners to benefit the collective DeFi ecosystems of Arbitrum and Avalanche.”

The deployment comes as Trader Joe has also expanded its ecosystem through partnerships and integrations with wallets, data clients and other vectors” since the second quarter as a means to spread the exposure of Avalanche and the Trader Joe itself.

Among the most notable recent partnerships include that of Trust Wallet and Crypto.com.

Trader Joe added that the protocol’s original automated market maker (AMM) — Joe V1 AMM — would also move onto Arbitrum One in addition to the Liquidity Book AMM, which will bring “zero slippage trades and discretized liquidity provisioning to all Arbinauts.”

As for why Trader Joe chose to deploy its AMMs on Arbitrum One, the team said they were impressed by Offchain Labs’ efforts in building an ecosystem of DeFi protocols on the network, which is indicative of its 53.4% market share in total value-locked (TVL) across all Ethereum layer-2 scaling solutions.

“Deploying (the) Liquidity Book will be a great addition to the vibrant ecosystem,” the team added.

Image shared by Trader Joe regarding its recent Arbitrum expansion. Source: Joe Content.

Despite announcing that it was “time to go global” on Crypto Twitter, the Trader Joe team confirmed that its “true home” and “top priority for all growth efforts” will continue to be on Avalanche.

Trader Joe also clarified that its token, JOE, in addition to lending platform Banker Joe, nonfungible token (NFT) marketplace JoePegs and its staking platform would not join Liquidity Book AMM and Joe V1 AMM on Arbitrum “in this initial phase.”

Related: New fix for curse of impermanent loss proposed on Avalanche

The announcement appears to have a positive impact on the price of JOE, which increased 13.35% from $0.163 to $0.185 over an eight-hour period before cooling off to $0.179, according to data from CoinGecko.

Trader Joe is currently the top-ranked decentralized exchange (DEX) and third-ranked DeFi protocol on Avalanche with $94.13 million in TVL, trailing only Ethereum-native lending platform AAVE and Avalanche-based liquid staking provider Benqi, according to data from DeFi aggregator DefiLlama.

Offchain Labs acquires Ethereum core dev team Prysmatic Labs

Through the deal, Offchain Labs hopes to build a sustainable future for Ethereum, through greater communication between teams developing on both layers and direct collaborations.

One of the core development teams behind the Ethereum Merge, Prysmatic Labs, has been acquired by Offchain Labs, the developer of the Ethereum layer-2 network Arbitrum. 

Announced in an Oct. 13 blog post by Offchain Labs, the deal’s financial terms were not disclosed, but it was noted Prysmatic Labs chose to join Offchain Labs “for many reasons,” but mainly because of the two companies’ alignment in their core beliefs.

Prysmatic Labs co-founder Raul Jordan said the move will “build a unified team stronger than the sum of its parts.”

“Merging with Offchain Labs made perfect sense to us as an Ethereum team because we develop software extensively in Go, are fully incentive-aligned with the success of Ethereum, and are focused on shipping quality software for others to use,” Jordan said.

Offchain Labs claims the future of Ethereum relies on layer 1 for consensus and data availability and layer 2 for execution and scalability, and its acquisition of Prysmatic Labs is a step toward combining experts in these two areas.

Despite the Prysmatic Labs team officially joining Offchain Labs, their “work will continue uninterrupted,” and their work in Ethereum node client software will continue to be developed under Offchain’s umbrella.

They are still developing Prysm as a fully open-source and neutral consensus client and bringing EIP-4844 data-sharding to production.

The post ends by teasing possible future collaborations between the two teams.

“There are several other joint initiatives that we plan to work on together, furthering both L1 and L2 development.”

Related: Offchain Labs launches Arbitrum One mainnet, secures $120M in funding

Prysmatic Labs is one of the core engineering teams behind the Merge and built Prysm, the leading Ethereum consensus client that’s now powering Ethereum’s proof-of-stake consensus.

Offchain Labs is a venture-backed and Princeton-founded company developing Arbitrum, a suite of scaling technologies for Ethereum, with two live chains, Arbitrum One and Arbitrum Nova.

Ethereum scaling network Arbitrum set for major upgrade on Aug. 31

The Nitro upgrade will further improve the transaction fee crisis that has plagued the growth of the Ethereum network over the last two years.

Ethereum layer-2 scaling solution Arbitrum is set to undergo one of its most significant upgrades on Wednesday, set to increase transaction throughput, slash transaction fees and simplify cross-chain communication between Arbitrum and Ethereum.

Referred to as the “Nitro” upgrade, Arbitrum reconfirmed the date of the upgrade in a Twitter post on Aug. 29, confirming that the upgrade will take effect on Aug. 31 at 10:30 AM Eastern Time, while noting a two to four hours of network downtime period is to be expected.

Abritrum is an Ethereum layer-2 scaling solution that utilizes Optimistic Rollup technology to bundle large batches of transactions off-chain from Ethereum smart contracts and decentralized applications before submitting it to Ethereum.

According to Offchain Labs’ GitHub account, Nitro will represent a “fully integrated, complete layer 2 optimistic rollup system” that builds on Arbitrum One with newly improved fraud proofs, along with updated sequencers, token bridges and calldata compression mechanisms.

Offchain Labs is a blockchain-based company established in 2018 which builds a suite of Ethereum scaling solutions, with the Arbitrum One network being the most notable network deployed by the firm.

Offchain Labs also updated its ArbOS (Arbitrum Operating System) component, which is now rewritten in the software programming language Go. The new version will improve cross-chain communication between Arbitrum and Ethereum, as well as transaction batching and data compression, which will in turn minimize costs on the Ethereum mainnet.

The document also stated that the state of Arbitrum One “will be migrated seamlessly” on to Nitro, which should, if executed correctly, rule out any possibility of a chain split.

In an Apr. 2022 article, Offchain Labs said the Arbitrum Nitro upgrade would be “the most advanced Ethereum scaling stack” and that “Nitro will massively increase network capacity and reduce transaction costs,” stating:

“Today, we throttle Arbitrum’s capacity, but with Nitro we’ll be able to release those controls and significantly up our throughput. And while Arbitrum today is already 90–95% cheaper than Ethereum on average, Nitro cuts our costs even further.”

According to decentralized finance (DeFi) aggregator DeFi Llama, Arbitrum has $936 million total value locked (TVL) on the network spread across 111 different protocols, with GMX, Stargate, Curve and Uniswap among the most popular applications.