Arbitrum, a dominant Layer Two blockchain on Ethereum (ETH), gains traction as a mainstream smart contracts platform. Thanks to its lightning-fast transactions and negligible fees, it attracts dApps of various types.
In this text, we’re going to cover the most popular decentralized cryptocurrency exchanges on Arbitrum. For newbie and pro traders, checking them might be a smart bet in 2024.
Decentralized exchanges (DEXes) on Arbitrum: Highlights
Decentralized exchanges (DEXes) and decentralized finances protocols (DeFis) on ARB are designed to make crypto trading, yield farming and decentralized lending/borrowing seamless, censorship-resistant and low-cost.
- Arbitrum is a second-layer scaling platform for Ethereum: it is designed to process come computations off-chain to reduce the pressure on mainnet;
- Arbitrum leverages Optimistic Rollups technology to scale Ethereum;
- The blockchain launched in mainnet in August, 2021; in 2022 it organized Odyssey campaign to attract crypto enthusiasts while on Mar.23, 2023 it airdropped ARB token and introduced DAO governance;
- In total, $2,6 billion locked in 400+ dApps on Arbitrum as of early Q1, 2024;
- GMX, Radiant, Gains Network, Camelot and Arbitrum Exchange are most significant DEXes and DeFis on Arbitrum;
- Besides that, ARB hosts the versions of leading multi-chain ecosystems Uniswap, Aave, Sushi, Curve, and Balancer.
In this review, we will focus on the protocols mostly associated with Arbitrum specifically; cross-chain heavyweights like Uniswap and Aave will be researched separately.
What is Arbitrum?
Arbitrum is a second-layer scalability solution (smart contracts network) on the top of Ethereum. Technically, it compresses the information in order to reduce the usage of Ethereum resources. It bundles multiple transactions and verifies them on Ethereum like a single one.
SEE ALSO: https://getblock.io/blog/what-is-arbitrum-and-how-arbitrum-works-inside-eth-l2/
As a result, it works cheaper and faster than Ethereum retaining its battle-tested level of security and decentralization.
Image by Arbitrum
Arbitrum was launched in mainnet on August 31, 2021 by Offchain Labs. Since March, 2023, the platform is governed by DAO: ARB token was airdropped to early users of the platform.
What is decentralized cryptocurrency exchange?
Decentralized cryptocurrency exchange or DEX is a service designed for exchanging one crypto to another with no intermediaries. DEXes don’t use centralized storage or wallets for crypto conversion: all operations are executed on-chain through sophisticated smart contracts designs.
On DEXes, users don’t need to create accounts, so this is the most confidential way to exchange crypto. However, they are vulnerable to attacks and price manipulations and usually have too complicated UXs for newcomers.
List of DEXs on Arbitrum
In total, there are over 400 decentralized applications (dApps) of various types on Arbitrum. As per the estimations of DefiLlama, there’s one DEX on Arbitrum with $500M TVL while nine other protocols have $100M+ TVL.
As such, here’s the list of top DEXes and DeFis on ARB by total value locked (denominated in U.S. Dollars, January 2024):
- GMX
- Uniswap v3
- Radiant
- Gains Network
- Stargate
- AAVE v3
- Sushi
- Camelot
- Curve
- Balancer v2
Out of this list, only Camelot has no versions on other blockchains: it is an Arbitrum-specific DEX. Also, for Uniswap, Aave, Curve and Balancer, Arbitrum wasn’t the first blockchain to launch on.
Top 5 DEXes on Arbitrum: Overview
There are dozens of active DEXes on the Arbitrum platform. Millions of crypto traders use them daily for secure and cost-efficient crypto trading.
GMX decentralized exchange
Decentralized perpetuals exchange GMX launched on ARB soon after its mainnet release in September, 2021. The opportunity to trade leveraged positions is its ‘killing feature’: the majority of decentralized exchanges work with spot positions only.
Image by GMX
To ensure accurate pricing, GMX relies on Chainlink Oracles that aggregate prices from numerous major exchanges.
SEE ALSO: https://getblock.io/blog/what-is-gmx-guide-to-gmx-crypto-and-platform/
Tokenomics of GMX is based on eponymous governance and utility token GMX. Also, it has LP rewards asset GMX Liquidity Provider Tokens (GLP). GMX liquidity providers share 70% of all fees raised by service.
As of January 2024, GMX is responsible for 20% of net TVL of Arbitrum’s ecosystem. Besides Arbitrum, GMX also has an Avalanche-based version.
Radiant Capital decentralized exchange
Decentralized lending protocol Radiant Capital is among the largest DeFis of Arbitrum ecosystem. It allows crypto owners to get rewards for providing liquidity including stablecoins. It accepts USDT, DAI, USDC stablecoins with reliable APY of 1.96-2.3%.
Radiant Finance issued core native utility, governance and rewards asset RDNT. Starting from v2 iteration, RDNT will only be distributed to users who provide liquidity.
In 2024, Radiant Finance prioritizes cross-chain development: tokens from various blockchains will be accepted by its liquidity mechanisms within a single interface.
Gains Network decentralized exchange
While initially launched on Polygon, Gains Network gained traction with its ARB-based version. It is a unique leveraged trading platform: besides cryptocurrencies, it works with ForEx pairs, selected stocks and commodities, thus, targeting the $7 trillion FX market.
Image by Gains Network
The platform offers decent 1000x leverage and accepts DAI deposits into gDAI vault. January 2024, gDAI vault allocated over $31 million in TVL. Gains Network uses GNS token as a backbone of its tokenomics.
Camelot decentralized exchange
Camelot introduces itself as an ‘Arbitrum-native decentralized exchange’. It offers one-click conversion between various assets as well as liquidity provision options (liquidity pools). Camelot is powered by native token GRAIL; its users receive rewards in xGRAILs.
In April, 2023, Camelot released v2 iteration with AMM powered by Algebra, a liquidity-focused protocol. Also, v2 will have advanced infrastructure and a number of new tokens added including the likes of stETH.
For early-stage products, Camelot offers a decentralized tokensale launchpad.
Arbitrum Exchange decentralized exchange
Arbitrum Exchange is a next-generation DEX for ARB ecosystem. Besides on-chain conversion of assets and liquidity pools, it supports dexVAULTS, farms, decentralized token bridges, and so on.
Its staking module allows users to get rewards in various assets (USDC, ARB, WBTC, WETH) for staking ARX, a native cryptocurrency of Arbitrum Exchange. dexVAULTS are eccentric auto-compounding investing mechanisms for diversified portfolios.
Bonus: Multichain DEXes on Arbitrum
Besides Arbitrum-specific DEXes and DeFis, ARB attracted a number of top-tier protocols active across various smart contract platforms.
Namely, Arbitrum has its own versions of Uniswap v3, AAVE v3, Sushi, Curve, and Balancer v2 protocols. As such, the L2 scaler has evolved into a go-to tech basis for all major crypto services in the EVM ecosystem.
Analytics of DEXes on Arbitrum
In this section, we’re going to cover some crucial statistics metrics to better understand the progress of the ARB ecosystem and major Arbitrum DEXes.
User metrics
Let’s review the number of visitors to the main domains of crucial Arbitrum dApps. Please note that this statistics isn’t necessarily equal to the number of active traders or liquidity providers.
| N | Name | User count (last 30 days) |
|---|---|---|
| 1 | GMX | 1,6 mln |
| 2 | Radiant Capital | 372,900 |
| 3 | Gains Network | 99,200 |
| 4 | Camelot | 737,300 |
| 5 | Arbitrum Exchange | <10,000 |
Trading metrics
Here are some trading metrics that portray tokenomics of top DEXes on Arbitrum network. Let’s review their total value locked (TVL) data and market capitalization indicators of native tokens.
| N | Name | TVL, M USD | Token | Token market cap, M USD |
|---|---|---|---|---|
| 1 | GMX | 551 | GMX | 418 |
| 2 | Radiant Capital | 117 | RDNT | 129 |
| 3 | Gains Network | 39 | GNS | 143 |
| 3 | Camelot | 115 | GRAIL | 30 |
| 3 | Arbitrum Exchange | 0.15 | ARX | 14 |
As such, the largest Arbitrum’s ecosystem token GMX has made it to CoinMarketCap’s Top-130 of crypto assets by market capitalization.
How to create token on Arbitrum
As all mentioned DEXes use Arbitrum as a technical platform for their exchange routers, they only support ARB-based tokens. Since Arbitrum is Ethereum-based L2, and, therefore, is fully EMV-compatible, it leverages the same ERC-20 standard for its tokens.
Setting up development environment
In order to start creating a token on Arbitrum, you need to have an Arbitrum-compatible development environment set up.
You can use the Truffle Box as a starting point, which provides an environment with pre-configured tooling for developing on the ARB network
Installing smart contract library
Then, you need to install the smart contracts library, i.e. a collection of instruments required for writing smart contracts (N.B.: every token is a smart contract).
The OpenZeppelin Contracts library can be installed by running the following command in your project directory:
npm install @openzeppelin/contracts
Importing smart contract sample
Once OpenZepellin is installed, we need to Import the ERC20 contract from it into the Contracts library in your Solidity contract file:
pragma solidity ^0.8.0;
import "@openzeppelin/contracts/token/ERC20/ERC20.sol";
contract MyToken is ERC20 {
constructor(uint256 initialSupply) ERC20("ARB_GetBlock", "AGB") {
_mint(msg.sender, initialSupply);
}
}
Minting and deploying token
Finally, we need to call the _ mint function to mint an initial supply of tokens to the contract deployer. You can also set the name and symbol of your token ("ARB_GetBlock", "AGB") using the ERC20 constructor.
Now we are ready to compile and deploy our first contract to the ARB network using Truffle or another Ethereum development framework.
Arbitrum and GetBlock: High-performance RPC APIs of dominant Ethereum's L2
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Here’s how our clients access ARB in few clicks:
VIDEO TO EMBED: https://www.youtube.com/watch?v=Vny8oM4Tq4g
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Closing thoughts
Since mainnet launch in August, 2021, Arbitrum managed to build a feature-rich ecosystem of decentralized finances protocols and decentralized exchanges.
As of Q1 2024, GMX, Radant, Gains Network, Camelot, and Arbitrum Exchange are the largest DEXes of the Arbitrum scene. Each of them can be considered best Arbitrum DEX.
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