Sugarcane Podcast

What is Arbitrum? | The L2 scaling solution for Ethereum

December 11, 2023 Sugarcane Season 2 Episode 7
Sugarcane Podcast
What is Arbitrum? | The L2 scaling solution for Ethereum
Show Notes Transcript

Product Series Ep 7: What is Magic Arbitrum?
https://arbitrum.io/

🚀 Diving into Arbitrum: Uncover the secrets of this Layer 2 solution and its impact on blockchain efficiency.

🌐 Sugarcane Integration: Learn how Sugarcane leverages Arbitrum for smoother, faster DeFi transactions.

💡 Innovation Unpacked: Explore the technical intricacies of Arbitrum's Optimistic Rollup technology.

🔐 Future of DeFi: Discover why this partnership marks a significant leap in secure, cost-effective blockchain operations.

Links: 🔗 Website - Podcast - YouTube - Twitter - Discord - TikTok

Disclaimer: 🚨 The information provided across all of Sugarcane's communication channels is for informational and entertainment purposes only. It should not be construed as financial or investment advice. Consult with a financial professional before making any investment decisions.

Speaker 1:

You're listening to the Sugar Cane podcast, where you get all of crypto's tastiest tips. Here's your hosts, sheldon Trotman and Rudy Dogum.

Speaker 2:

Sheldon, can you explain to me what is Arbitrum?

Speaker 1:

So, arbitrum, if you remember back to our earlier episodes, they're an L of 2. So they're basically like a chain that's still connected to a 3rd-dimensional blockchain, but it's able to do more, so able to handle more throughputs. They have to do more from the perspective of assets and also from interacting with it. It's also cheaper for the end-consumer as well.

Speaker 2:

Gotcha, and how do we use it in Sugar Cane?

Speaker 1:

Yeah, so Sugar Cane itself is a multi-chain application or a mobile app, essentially. So what it really means is that behind the scenes, when you actually sign up, we deploy accounts for you or addresses for you on a number of different chains. So Arbitrum is one of them Polygon, optimism, ethereum, mainnet so we deploy these smart accounts for you on all these different chains and you actually are able to hold assets on all these different chains. So, from our perspective, arbitrum is just one of the ones that we use to store assets, because it has a certain amount of protocols or products on the Arbitrum blockchain that are not existing on other chains. So that's kind of why we use Arbitrum, because it's one of the more popular defy-specific chains as well.

Speaker 2:

And is there a lot of volume on there? Because I heard of Arbitrum often and I know it's a popular one, but I don't.

Speaker 1:

Amongst all the actual L2s, it has the largest what's called TVL, so Total Value Blocked, or essentially, how much assets are sitting on that particular chain. Arbitrum, from the perspective of defy and financial activity, is one of the more popular chains Just because a lot of their protocols, a lot of the products that are on Arbitrum specifically, have been around for a while. A lot of people trust Arbitrum as a platform, as an actual blockchain, and so they migrate a lot of their money from, let's say, Ethereum, the Mainnet, over to Arbitrum or from other chains over to Arbitrum to be able to interact with those products on Arbitrum Nice.

Speaker 2:

And when users use Sugarcane, is it easy for them to swap between Ethereum, mainnet and Arbitrum and any other chain, or do they kind of not even know what's going on?

Speaker 1:

They don't even know right. For example, if you're actually having assets on Ethereum in your MetaMask and let's say you want to send yourself money to actually use within the Sugarcane product, you can send it to your Sugarcane address on Ethereum and, dynamically, when you actually, let's say, you want to lend out money, let's say we identified that, let's say, lending on Arbitrum is the cheapest or it actually gets the most yield from that, what we do is behind the scenes. You actually can click, so, let's say, lend, but in that lending click you actually do three things. You have a transaction that sends the assets from Ethereum over to Arbitrum, so that's called bridging. It does what's called swapping, so it actually swaps from, let's say, your USDC coin, as you saw in our previous episode, into the actual product that you want on Arbitrum. So you actually now get the lending yield on Arbitrum. And then, the third thing it actually goes to your Arbitrum account, your Arbitrum address on your. Again, you don't actually need to know that, but just look at it and give you context.

Speaker 2:

That's nice. So it's kind of always looking for the cheapest transaction fees within L2, then also finding whatever the best rate is on whichever chain is available at the time.

Speaker 1:

We actually, at the start we prioritized the yields for the end consumer more than actually the cost. So, for example, given the fact that Shuriken the platform and team, we cover the cost for the consumer. We just make sure that the user gets the best yield.

Speaker 1:

So whether that means that you're on Arbitrum and you get the best yield there, or Ethereum Mainnet and you get the best yield there, or any other L2, we do the work to find all the best yields, we present that to you and then you can say okay, I want to lend, and we find the place where that's best. We put it into there, and right now, Arbitrum is again one of the leading blockchains for finding the best yields. That's why we like to use them as our solution, one of our solutions.

Speaker 2:

Was it easy using Arbitrum and building the top of Arbitrum? Because it's an L2, it's roaring about a whole different chain of transactions and all this DeFi experience accessible to you and looking through it all, it sounds complicated. So I'm wondering how it was building on Arbitrum itself.

Speaker 1:

I mean, the actual Shuriken product is extremely complex because behind the scenes not for the consumer, though behind the scenes it's just extremely complex because there's a lot of different things we're juggling at at any given point where there's finding the best yields and we have an AI model that actually is able to dynamically look real-time at all the chains and find the best yields.

Speaker 1:

There's a lot of interoperability, as you saw from our previous conversation around going from one chain to another. How do you do that in a, whether it's interoperable or seamless, there's complexity when it comes to actually like the smart contracts on Arbitrum itself. So like we do have smart contracts that are living on Arbitrum that handle some of the swaps for people. So like there's a lot of complexity when it comes to like using this multi-chain world, but specifically with Arbitrum back to your question it's like it was easy, right, like it was like we built out smart contracts in Solidity, which is just the programming language, and those can be deployed to multiple different chains that support Solidity, the firmer, and Arbitrum is one of them, ethereum is another one, polygon is another one. So all these different chains support kind of Solidity language which is able to be coded once.

Speaker 2:

Nice. So it wasn't out of your league of already building with Ethereum, or you're already pretty much building with Arbitrum, just because it's the same language and same or similar chain, all EVN compatible.

Speaker 1:

Yeah, nice.

Speaker 2:

Then yeah sounds good. So I guess if any new builders are trying to build on Arbitrum or on Ethereum, they should have no problem translating between the two.

Speaker 1:

Yeah, it's pretty straightforward and also like there's a lot of like new frameworks and evolutions that are coming into the Arbitrum ecosystem that help bring down the costs and help makes the actual interactions faster. So, like a lot of the changes are happening on Arbitrum to make that whole process more seamless for developers. So definitely check them out if you're thinking about building.