Arbitrum Teams Up With AltLayer In Layer 3 Push

Despite Ethereum’s Layer 2 ecosystem being far from realizing its full potential, market leader Arbitrum is already setting its sights on Layer 3.

Arbitrum entered the Layer 3 arena in March with the launch of Arbitrum Orbit, describing the protocol as “a permissionless solution for any developer to build a Layer 3 blockchain using Arbitrum technology.” Today, Arbitrum has selected AltLayer, a web3 infrastructure provider, as the first rollups-as-a-service provider supporting Orbit.

“With the addition of AltLayer, we’re taking another necessary step towards maximizing creative ability while minimizing the tedious tech process behind application development,” said Anuja Khatri, head of growth at the Arbitrum Foundation.

AltLayer said it will roll out support for Orbit on its launchpad platform by the third quarter, allowing “those with little to no coding experience to spin up a customized Layer 3 tethered to Arbitrum within 5 minutes.”

Layer 3

The news comes as top scaling teams are increasingly pivoting to facilitate development on Layer 3.

Layer 3 networks, also called AppChains, are specialized networks that host a single decentralized application. They are secured by Layer 2 networks, inheriting the security guarantees of an underlying Layer 1 network, such as Ethereum.

Matter Labs, the team behind another Layer 2, ZkSync Era, told The Defiant that Layer 3s provide a superior alternative to private enterprise chains like Hyperledger.

“Where Layer 2 is kind of one size fits all blockchain, Layer 3 is enterprise-ready, ready for 10x customization [and] 10x scaling,” said Steve Newcomb, Matter Labs’ chief product officer.“If you want the most security, you do a ZK-rollup at Layer 3.”

AltLayer says L3s are highly suited to decentralized social, gaming, and financial applications. Yaoqi Jia, AltLayer’s CEO, told The Defiant it will provide Layer 3 services secured by other L2s in the future.

AppChain Adoption

dYdX, the top perpetuals exchange by trade volume, was among the first applications to migrate away from L1 in favor of deploying on its own chain. It migrated to an L2 AppChain secured by StarkWare in April 2021.

The exchange is now planning to launch a new Cosmos-powered AppChain in the Cosmos ecosystem by October, having deployed its testnet at the start of this month.

In May 2022, Yuga Labs, the team behind the Bored Ape Yacht Club NFT collection, expressed its desire to migrate its APE token onto a dedicated AppChain. But ApeCoin holders shot down the proposal the following month, opting to remain within the Ethereum ecosystem.

DefiKingdoms, a once high-flying GameFi project, launched as a subnet on Avalanche in April 2022.

Polygon also entered the Layer 3 fray in April 2022 with the launch of its “Supernet” AppChain infrastructure. In October, it announced that Nubank, a top Latin American fintech boasting more than 70M users, plans to launch its own chain and token leveraging Supernet technology.