A slew of new altcoin projects built on Ethereum layer-2 Arbitrum are quietly growing under the radar, according to the crypto finance platform Bankless.
In a new note to subscribers, Bankless says the Arbitrum ecosystem is heating up after a recent network upgrade helped to increase its throughput and lower transaction fees.
Arbitrum uses technology known as optimistic rollups to essentially offload significant amounts of processing and data storage from Ethereum’s mainnet, allowing for transactions that are faster, cheaper and more private.
Ben Giove of Bankless says he has his eye on five Arbitrum projects, starting with lending protocol Vesta Finance (VSTA), which aims to allow users to borrow against their crypto assets without selling them.
Within the Vesta ecosystem is VST, a collateralized stablecoin that allows users to borrow against supported assets with no interest rate.
Second up on Bankless’s radar is Umami Finance, an ecosystem of strategy vaults for earning yield. Umami aims to provide access to a series of reliable on-chain revenue streams from Arbitrum safeguarded from market volatility while using “innovative on-chain hedging strategies.”
UMAMI is the ecosystem’s native token that users can stake to receive shares of the protocol’s revenue, denominated in ETH, from vault fees.
Says Bankless,
“Umami helped popularize the trend of paying token holders a cut of product and treasury farming revenue in ETH, with UMAMI lockers currently able to earn a yield of 9%.”
Third on the list is Premia, which aims to allow for super capital efficient options trading as well as earning yield on fees and premium. Bankless says Premia is unique in that it uses American-style options, which can be exercised at any time before expiry, as opposed to European-style options which are exercised at expiry.
The fourth Arbitrum-based project on Bankless’ radar is Y2K Finance, which aims to provide structured products that allow users to speculate, hedge, leverage or trade the different components of pegged assets.
At time of writing, there is no Y2K token, but Bankless says there should be one launching in the next several weeks.
Last on Bankless’ list for Arbitrum projects to watch is Rage Trade, which is attempting to build a perpetual exchange wth the most liquid ETH perp.
Rage Trade is aiming to use 80-20 vaults, which is a liquidity-providing strategy where 80% of total value locked (TVL) earns yield on an external protocol while the other 20% provides concentrated liquidity directly on Rage Trade.
According to Bankless, Rage Trade is also planning to integrate directly with Ethereum to allow the 80/20 vaults to get yield from any layer-1 or layer-2.
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