From Decentralized Finance full stack to RWA infrastructure, the "has-been internet celebrity" Arbitrum is becoming the preferred platform for institutions to get on board.

Author: Cheeezzyyyy

Compiled by: Tim, PANews

In recent years, Arbitrum has not only continued to scale, but it is also entering a unique phase of ecological exploration, playing a game that few can participate in.

This evolution redefines the boundaries of cryptocurrency adoption: DeFi native stage → gradual entry of institutions → initial emergence of the financial system.

Core Insights

Arbitrum has long entered the mature stage of the ecosystem, forming a comprehensive and mature market layout in the DeFi track.

And now, it has achieved a crucial milestone:

• Spot DEX: L2 cumulative trading volume firmly holds the top position, reaching 53.42 billion USD
• Perpetual contracts: Total trading volume reached $802 billion, setting a new historical high.
• Lending services: Liquidity depth greater than 1.2 billion USD, can enhance productivity scale through credit.
• RWA-Fi: Grew to a historical peak of $262.5 million, covering 20 assets.

Arbitrum's self-sustainable growth is reflected in three aspects: strong user growth, deep liquidity, and the continuous activity of various business lines.

In the third quarter of 2021, during the initial stage of the virtual automated market maker (vAMM) led by GMX and Gains Network, Arbitrum established the foundational layout for perpetual contract DEX.

Nowadays, user growth has entered a stable and mature phase, with a high user retention rate clearly evidenced in the daily trading volume trend:

• Since the third quarter of 2023, the daily trading volume has achieved an approximately 3-fold increase (from $1 billion to $4 billion)
• Cumulative trading volume reached $802.5 billion

Since then, the perpetual DEX ecosystem has achieved diversified evolution, with professional players continuously emerging:

• Rho Protocol: Native cryptocurrency interest rate derivatives (centered around centralized exchange funding rates)
• Aark Digital: Ultra-high leverage trading (leverage up to 1000 times)
• Ostium: Multi-Asset Allocation Coverage (Forex/Stock Indices/Commodities)

The ecosystem demonstrates a parallel trend of high user stickiness and product innovation, confirming its sustainable nature of self-blood production and dynamic evolution.

As of the third quarter of 2024, the total locked value (TVL) of the RWA-Fi sector under Arbitrum is accelerating towards a historical peak of $262.7 million.

With the support of a diverse and growing global pool of fund participants, this momentum further solidifies Arbitrum's position in the enterprise-grade tokenized DeFi space.

It is worth noting that the $EUTBL issued by Spiko Finance is now leading the EU government bond tokenization market, capturing about 32% market share, surpassing the following competitors:

• Franklin's $BENJI
• BlackRock's $BUIDL

All of this indicates that institutional adoption is no longer just a theoretical stage.

As institutional giants lead the trend, it is also worth noting the increasing diversity within the Arbitrum sub-ecosystem.

This spans RWA integration and DeFi native innovation.

This integration creates a rich scenario that meets various needs:

• Institutional allocators seeking compliant revenue-generating assets (such as government bonds, credit bond markets)
• Cryptonative users chasing unlicensed leverage, structured products, or long-tail yield strategies

By covering two special user groups, Arbitrum positions itself as a comprehensive ecosystem:

• The ability to attract capital from various fields, from DeFi to TradFi.
• Arbitrum's Orbit and Stylus are becoming the core engines for growth across multiple domains, providing the capability to build dedicated chains for vertical scenarios across industries.

This is in line with the "Application Chain Theory", which holds that customization + flexibility are crucial for optimizing infrastructure.

The adoption rate of this technology framework is currently rising rapidly.

• 83 official ecosystem partners
• 41 mainnet launched (up 32% since April 2024)
• 21 test networks + 21 in development
• The total locked value (TVL) of the Arbitrum ecosystem (excluding ArbitrumOne) exceeds $320 million.

If this trend continues, the framework is rapidly gaining recognition across the industry as an enterprise-level infrastructure for the next generation of blockchain applications.

Arbitrum is gaining increasing favor from large institutions, a trend supported by the dual validation of actual application needs and infrastructure levels.

• Global funds: BlackRock, Franklin Templeton, Invesco, and Wellington Management are building RWA-Fi liquidity.
• Infrastructure: Plume Network, Novastro, and re.al are bridging real-world capital to on-chain.

And now, the ultimate issuance network of traditional finance has begun to take shape:

• Converge is building an institutional-grade settlement layer (for example, Ethena, Securitize).
• Rayls Labs has launched a compliance chain for the banking system.

The conclusion is very clear: Arbitrum is becoming the preferred infrastructure for real-world institutions to deploy.

The surge of MEV phenomena signifies that the ecosystem is moving towards the next stage of mature development.

The Timeboost auction mechanism of Arbitrum introduces an efficient and fair competition model that perfectly mirrors the proposer-builder separation (PBS) model of the mainnet.

• The usage rate has been quite high since its launch less than two months ago.
• 1.42 million DAO revenue (annualized approximately 8.5 million)
• Now over 60% of trading fee income comes from Timeboost.

We have observed early signs of MEV atomic arbitrage monetization, with most activities primarily concentrated on high-volume trading pairs (such as Bitcoin, Ethereum, and stablecoins).

I believe that the hallmark of maturity in the next phase will be the greater share of long-tail assets in MEV traffic.

! From DeFi full-stack to RWA infrastructure, Arbitrum is becoming the preferred platform for institutional entry

Interestingly, the Timeboost Fast Lane currently accounts for about 5% of the total transaction volume on Arbitrum, and has consistently maintained a stable upward trend since its launch.

But what further illustrates the problem is the trading volume footprint:

• The current daily trading volume of approximately $175 million comes from MEV arbitrage.
• The average daily trading volume of Arbitrum over the past month was approximately $900 million, with about 21.8% coming from the Timeboost fast track.

Please note that this is significant to me, as it indicates that MEV is no longer a fringe phenomenon, but has become a core engine driving substantial trading volume.

As MEV develops into a native revenue stream, this phenomenon not only signifies an increase in user maturity but also marks a new stage in the profitability mechanism of the protocol layer.

Finally, regarding the InfoFi application

Arbitrum has gained attention as a core ecosystem embracing this narrative, and the recent integration of the Yapper leaderboard with Kaito is a prominent example of this.

The project comes with a 3-month incentive of 400,000 $ARB tokens (about $124,000).

Currently, a new form of second-layer InfoFi is taking shape: Yapyo positions itself as a decentralized consensus hub, integrating social collaboration with incentive design.

Details are not yet clear, but early signs suggest that $YAPYO is implementing a niche market entry strategy targeting specific protocols; of course, this is my personal opinion.

According to the data, it is clear that Arbitrum is far from an ordinary ecosystem.

It has broken through the critical point and is entering a new stage of transitioning from DeFi to broader on-chain applications.

The maturity depth and evolutionary dynamics are self-evident, so not all chains are playing the same game.

Arbitrum is going its own way.