Cross-chain bridges are no longer popular? Why does Orbiter want to build L2?

Written by: Haotian

Recently, Tiger Research published an in-depth research report on the cross-chain bridge @Orbiter_Finance, listing its ultra-high market share data in the mainstream layer2 asset cross-chain, and mentioned that Orbiter is making a strategic transformation from cross-chain bridge to Vizing layer2 chain. The question is, since the "business model" of the cross-chain bridge is not bad, why is it still ambitious to engage in layer2 chain? Come, let me try to interpret it:

1) Since Ethereum has set the rollup-centric layer2 expansion strategy, "cross-chain bridge" has become a top priority as a key component service connecting various layer2 message communications and asset interoperability.

However, since the original cross-chain path defined by Ethereum is basically L2——>L1——>L2, plus the 7-day challenge period window of OP-Rollup, if A layer2 chain wants to transfer an asset to B layer2 chain, in addition to the two large cross-chain gas fees between the main network and layer2, there is also a long time cost of capital lock-up.

As a result, most of the cross-chain assets between layer2 rely on centralized CEX's centralized solution for withdrawing coins, or on-chain third-party cross-chain bridge protocols such as Orbiter, Hop Protocol, and Wormhole.

This is why, as stated in the report, Orbiter Finance can maintain its leading position in this round of layer2 expansion. According to data disclosure, its market share is roughly 40%, and it has caused a unique Maker mechanism, which almost monopolizes 70% of the profits in the cross-chain bridge market. These data can indirectly confirm the success of Orbiter in the cross-chain bridge track.

2) However, after the Cancun upgrade, the layer2 market was once in a flourishing situation. The two major camps, mainly OP-Rollup and ZK-Rollup, continued to expand vertically and continuously promoted their own technology stacks and ecosystems. For example, OP Stack has developed dozens of new layer2s including Base as part of its Superchain grand strategy.

However, both OP Stack and ZK Stack are focusing on developing their own closed ecosystems. Although their wings are gradually growing, they are increasingly showing a trend of separatist development, which leads to further dispersion of layer2 liquidity and the continued fragmentation of user experience.

In this case, @VitalikButerin has repeatedly called for layer2 to improve interoperability, and launched the Helios light client to accelerate the de-trust and interoperability between layer2. In addition, many chain abstractions and ZK technology service providers including @ParticleNtwrk and @ProjectZKM have also helped the Ethereum layer2 ecosystem to unify liquidity through the intervention of third-party interoperable layers.

This means that the Endgame of the Ethereum layer2 ecosystem will definitely build a consistent interoperable layer, which means that if cross-chain bridges such as Orbiter are satisfied with the current "business model", they may eventually face the risk of being eliminated by the market.

3) Therefore, it is not difficult to understand why Orbiter has changed from passive to active and launched the Vizing layer2 expansion solution to achieve secure and low-cost seamless asset interaction between layer2 multi-chains.

As mentioned above, other layer2s are all development strategies of princes’ separatism, and Vizing may only have the "horizontal alliance" strategy to go. To this end, the Vizing chain has mainly built three core features: 1. Vizing Account Abstraction (VAA): allows users to manage multiple Layer2 networks with a single account, greatly simplifying the user experience, similar to the unified account abstraction service provided by the chain abstraction service; 2. Vizing Environment Layer (VEL): provides developers with a unified cross-chain development environment, lowers the threshold for ecological construction, which is equivalent to a unified cross-chain communication standard. First unify the standards and then promote ecological development; 3. Cross-chain information communication between Rollups: reduce dependence on Ethereum L1, adapt to different layer2 Rollup chains, use unified and standardized interfaces to communicate with them, and then provide conditions for efficient and decentralized layer2 asset intercommunication; above.

In general, under the premise that layer2 is inevitably moving towards the unification of cross-chain interoperability, Orbiter chooses to actively "revolutionize" itself and promote a more ambitious and imaginative layer2 interoperable shared layer strategy.

Moreover, with the subsequent ZK-SNARKs of the Ethereum ecosystem and the subsequent Roadmap, including the expected Beam Chain network upgrade plan, etc., all point to a unified layer2 interoperable ecosystem. Before that, who can truly contribute value to the interoperability of the Omini full chain of layer2 will directly affect its subsequent ecological niche in the Ethereum ecosystem.