Uniswap Labs Blog

Scaling Summer: Spotlight on Arbitrum
August 15, 2023
Part 1 of a series on using L2s with the Uniswap app

Scalability is an important property of blockchains. It measures how many transactions a blockchain can process, how quickly, and how cheaply. You've likely experienced scaling limitations --- paying high gas fees or waiting for your swap to execute.

Years of hard work researching different scaling solutions have laid the foundation for a thriving ecosystem of applications, users, and activity on these networks. This summer, Ethereum scaling solutions have exploded in popularity and usage. After years of research and development, Ethereum has a thriving ecosystem of Layer 2 (L2) networks, applications, and users.

The Uniswap Protocol is deployed across a variety of different chains and the Uniswap app currently supports 4 chains in addition to mainnet with more coming. Today we're going to dig into Arbitrum -- which was launched in 2021 by the Offchain Labs team and was the first L2 to deploy the Uniswap Protocol.

Uniswap is the leading liquidity protocol on Arbitrum, processing over 50% of all swapping volume in the past 7 days at $675M. These swaps can be up to 22x cheaper on Arbitrum than mainnet, making Arbitrum a popular destination for inexpensive onchain activity. The Uniswap app makes it easy for swappers to fund their wallets directly on Arbitrum with our fiat-on-ramp.


Daily Uniswap volume on Arbitrum

Arbitrum One is an Optimistic rollup and is the Arbitrum crypto ecosystem's flagship chain with over 150,000 daily active users (DAUs) -- a 5x increase between 2022 and 2023. It derives its execution finality from the Ethereum mainnet by posting data to the Ethereum mainnet. This data is used to verify that the transactions on Arbitrum have been processed correctly.

Offchain Labs has also shipped Arbitrum Nova, the first AnyTrust chain on mainnet that shares the same codebase as Arbitrum One, but does not rely on Ethereum for execution finality and allows for higher throughput and lower transaction fees. This makes it a powerful technology for social and gaming use cases. Arbitrum Orbit is a permissionless solution to deploy a fully customized Layer 3 chain that settles to one of Arbitrum's public L2 chains, like Arbitrum One or Nova.

While Arbitrum has seen significant user growth, it's still far less than the 313,000 DAUs on mainnet -- underscoring one of the biggest hurdles facing Arbitrum and all L2s is adoption. To help developers to integrate with L2s on the back end, the Offchain Labs team is working on Stylus to let developers deploy programs in their preferred languages, like Rust, C, and C++, alongside Solidity on Arbitrum.

But the backend is only half the battle. We need a better UX, like the Uniswap app. The app's's fiat-on-ramp will onboard new users directly to various L2s including Arbitrum, skipping the confusing process of onramping to a CEX and then bridging to Arbitrum. Once they're on Arbitrum, the Uniswap app's WalletConnect feature will let them connect and swap on Arbitrum without having to switch networks. With the Uniswap app, users have the perfect tool to explore the Arbitrum ecosystem.

Uniswap is encouraging users to go onchain and explore L2s as part of #ScalingSummer. To join our educational quests, click here.

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