Temperature Check: Change Arbitrum Expansion Program to allow deployments of new Orbit chains on any blockchain

Proposals Finalized AIPs
1

UPDATE - We are changing this proposal from Constitutional to Non-Constitutional. The motivation is to twofold.

  1. The Quorum for a Constitutional AIP is exceedingly high and votes on snapshot very rarely (if ever) achieve >180m votes,
  2. There is no amendment to the Constitution or on-chain code. The proposal is instructing the Arbitrum Foundation on whether the Arbitrum Expansion Program should be changed.

On the 18th of January 2024, the Arbitrum Foundation announced the Arbitrum Expansion Program which allows projects to fork the Arbitrum codebase, modify it to their business needs, and deploy it on any chain that derives security from Ethereum. In return, the new Orbit chain is expected to share 10% of their chain’s profit back to the wider Arbitrum ecosystem. This includes 8% for the ArbitrumDAO and 2% for a new Arbitrum Developer Guild.

Support chains other than Ethereum?

One restriction of the Arbitrum Expansion Program is that a new Orbit chain must be deployed on any chain that derives security from Ethereum.

More specifically:

The “Arbitrum Expansion Program” is a suite of tools and services maintained and provided by the Arbitrum Foundation, a Cayman Foundation Company (the “Foundation”) designed to enable you to deploy and operate a trust-minimized network that has its security depend on the security of the Ethereum blockchain, which by way of example, is intended to include optimistic rollups, zk-rollups, optimiums and validiums that settle to Ethereum (each, an “Arbitrum Nitro Instantiation”).

Over the past few weeks, the Arbitrum Foundation has received inbound interest from projects that want to deploy their own Orbit chain on other networks including, but not limited to: Bitcoin, Binance Smart Chain, Cosmos, and others. We expect this type of interest to increase over time as the Arbitrum Tech Stack gains popularity on Ethereum.

This leads to the following question:

  • Should the Arbitrum Expansion Program be changed to allow Orbit chains to be deployed on blockchain networks other than Ethereum?

The Arbitrum Foundation is requesting the ArbitrumDAO to decide on whether the Arbitrum Expansion Program should further expand and allow new Orbit chains to be deployed on chains other than Ethereum (and its derivatives).

There are a few points to consider when evaluating the above question:

  • Revenue share. Allowing widespread deployment of Orbit could potentially increase the revenue generated for the ArbitrumDAO simply due to the increased number of deployments.

  • EVM dominance. It can be argued that the EVM and Solidity has become dominant across the industry as it was easily adoptable by blockchain projects including rollups like Arbitrum. Accordingly, allowing widespread deployment of Orbit can further bolster EVM and Stylus (EVM+) dominance across the industry.

  • Ethereum’s competitive advantage. Restricting Orbit chains to only Ethereum can potentially act as a competitive advantage for the Ethereum ecosystem, but there is a potential tragedy of the commons if the Arbitrum Tech Stack is only restricted to Ethereum while other rollups can be freely deployed elsewhere.

  • Alleviate confusion on definitions. There are increasingly blurry lines on what it means to settle on a particular chain as projects adopt different data availability layers, host chains, and bridge configurations. It may even be possible for a single rollup to have multiple validating bridges across different blockchains. Changing the license can alleviate the need to resolve these blurry lines and allow projects greater certainty when deciding to deploy an Orbit chain.

Of course, the above is not an exhaustive list, and there are other points the community may want to consider when making their decision.

Implementation

Assuming the ArbitrumDAO approves Orbit chains to be deployed on any chain, then the Arbiturm Foundation will be responsible for collecting the 10% chain profit revenue share on the new chain and eventually migrating the funds into the ArbitrumDAO’s treasury and the Arbitrum Developer Guild.

The only requirement a project should consider before deploying on a chain is to check whether the Arbitrum Foundation has deployed a multisig to collect the revenue share. A multisig will be required to help the Arbitrum Foundation collect the fees and periodically bridge it to the ArbitrumDAO’s treasury.

Additionally, the Arbitrum Expansion Program’s description will be updated with the following:

Arbitrum Expansion Program
The “Arbitrum Expansion Program” is a suite of tools and services maintained and provided by The Arbitrum Foundation, a Cayman Islands foundation company (the “Foundation”) designed to enable you to deploy and operate a trust-minimized scaling solution on a public blockchain network (each, an “Arbitrum Nitro Instantiation”). Subject to the terms of, and your compliance with, this Arbitrum Expansion Program Agreement (“Agreement”), the Foundation hereby agrees to make the Arbitrum Expansion Program available to you to develop and launch an Arbitrum Nitro Instantiation. The Foundation will also help you pursue modifications and improvements to the Nitro Software (as defined below) in cooperation with the Arbitrum DAO and in accordance with the Arbitrum DAO Constitution, as amended, available at The Amended Constitution of the Arbitrum DAO | Arbitrum DAO - Governance docs (along with the Arbitrum Expansion Program, the “AEP Services”). The Foundation reserves the right to determine the AEP Services available to you, and it may change the nature of the AEP Services available to you under this Agreement from time to time in accordance with the values and decisions of the Arbitrum DAO.

Discussion and Voting schedule

We plan to organize 2 governance calls to allow the community to discuss the merits on whether the expansion program should be extended:

  • 22/4/2024 → 10:00 UTC
  • 26/4/2024 → 16:00 UTC

After community discussion, the proposal will be put up for a temperature check on Snapshot with the following voting options:

  • Any blockchain network
  • Only Ethereum L1

There is no need for an on-chain governance vote (via Tally) as the license is managed by the Arbitrum Foundation.We will require the snapshot vote to reach the same Quorum as required by a Non-Constitutional AIP.

If the ArbitrumDAO decides to change the license, then the Arbitrum Foundation will endeavor to implement the necessary changes.

8 Likes
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This is an interesting problem to say the least, while allowing other chains does lead to increased revenue for the DAO, it also may lead to declining EVM dominance. In my opinion it is not possible to restrict development of technology on any chain, even if we decided not to allow other chains to fork arbitrum codebase, the builder will just choose another solution and go about their deployment.

Hence I think that the DAO should consider allowing other chains to use the Arbitrum codebase and perhaps we can increase the fees by a few bps for deployment on other chains to still incentivitze folks to build on Ethereum, but also capitalising on the fact that the technology which is in demand can be leveraged to fuel the Arbitrum DAO.

Is there any solution to permissionlessly bridge fees back to Arbitrum DAO instead of collecting the fees in a multi-sig?

1 Like
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Personally, I think low-barrier mass expansion is the play for orbit. If 50 non-ETH are deployed and even 3 are economically successful, I think it’s worth it. But at the developer penetration level, expanding outside the current ETH dev bubble is a powerful trojan because now you have 50 dev teams that have been arbitrum pilled.

Lots of L1/L2s are selecting evmos (or cosmos sdk) to then build new blockchains tapping into the evm dev pool. I think compared to evmos, this is actually more eth aligned, especially if the foundation converts the fee proceeds to the eth token.

I am fully on board with friction-free satellite orbit deployments to other corners of the metaverse.

Will leave you with this fitting video on my feelings

2 Likes
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Comment on behalf of Camelot

From a business and economic standpoint, it makes sense to aggressively expand to other chains given the many competing alternatives. We’ve already started to see this with projects like Degen chain and experimental approaches involving BTC L2s.

However, we believe this expansion shouldn’t come at the expense of EVM chains. We prefer to have a solid foundation on those only rather than a less stable expansion across multiple platforms.

Currently, we see areas for improvement in the existing Orbit offering based on our experiences and the challenges we’ve encountered. Key points for improvement include enhancing bridging solutions, improving overall interoperability, and increasing the available infra services. Focusing on these improvements within EVM chains could be more beneficial before considering further expansion.

Ultimately, the decision depends on the current workload and resources of the OCL development team, as each expansion to a new vm will require significant effort and ongoing maintenance. Greater visibility into these factors would definitely help everyone provide more informed feedback.

3 Likes
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This is a clear expansion opportunity, the argument that this might reduce EVM dominance won’t matter because if Orbit isn’t available, others will fill this niche. Getting there first makes the most sense for the DAO.

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I am confident that this proposal will not lead to a reduction in EVM dominance

Therefore, this is definitely a good topic for the development of Arbitrum

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Posting on behalf of the Treasure ARC

The Treasure ARC is supportive of this proposal, especially as it coming from potential customers.

Over the past few weeks, the Arbitrum Foundation has received inbound interest from projects that want to deploy their own Orbit chain on other networks including, but not limited to: Bitcoin, Binance Smart Chain, Cosmos, and others. We expect this type of interest to increase over time as the Arbitrum Tech Stack gains popularity on Ethereum.

We would like to ensure that this is done in a way that does not compromise development/support for EVM chains as Orbit is still nascent.

The OCL development team prioritizes say BTC, BNB etc. over other chains. Echoing Camelot’s comment here.

This would require significant development and support effort and it would be good for the DAO to have additional insight into which chains would be prioritized.

1 Like
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This is a welcome development, and I support it.

Aside from the obvious financial benefits, this proposal will increase Arbitrum’s value and attention in other ecosystems. If there is a demand for our product and we don’t offer it, someone somewhere will fill it up.

9

Restricting progress and expansion to non-EVM chains is likely futile - if Arbitrum does not provide solutions for other chains, developers and builders will simply seek and find alternatives elsewhere.

The implementation of this proposal would therefore provide Arbitrum with a clear path towards capturing an opportunity it otherwise would miss.

Additionally, beyond the proposal’s clear financial upside, it also enhances Arbitrum’s visibility and perceived value across different blockchain ecosystems, effectively fueling and proliferating its growth.

2 Likes
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Why We Believe Arbitrum and Orbit Need to Be Compatible with Non-EVM Systems

Before discussing anything further, I believe Arbitrum and Orbit should be technologically open. This openness should extend beyond various EVM ecosystems to include non-EVM systems. As a technology provider, Arbitrum should aim for compatibility and openness, regardless of which system prevails in the future, aligning with the spirit of decentralization.

New forces are emerging in other blockchain domains, including TON, Near, and the BTC ecosystem represented by Babylon. Arbitrum has achieved a leading position among Layer 2 solutions within Ethereum, but we should not be complacent and should explore these new opportunities. For example:

TON Ecosystem: Starting from Telegram, TON demonstrates the feasibility of large-scale blockchain adoption. Attracting Web2 users to Web3 has always been a goal, and TON offers a close opportunity to achieve this. Many new small game applications are emerging on TON. Arbitrum should serve not only Ethereum-native Web3 users but also new entrants from Web2. Compatibility with TON on Orbit is essential for this first step.

BTC Ecosystem: Innovations like inscriptions, ordinals, and upcoming BTC Layer 2 solutions show the BTC ecosystem’s potential. Babylon’s Restaking ecosystem could further promote this growth. BTC has a higher capital volume and security than Ethereum. Most BTC ecosystems are non-EVM dominated. Ignoring this potential would be a mistake.

Summary: Abandoning the non-EVM ecosystem means losing:

  • The largest Web3 traffic gateway via Telegram and TON.
  • The largest capital volume in the BTC ecosystem.
  • The potential chances of new trends.

What We Hope to Achieve with a Non-EVM Compatible Orbit

As mentioned, TON and Telegram are currently the largest traffic gateways to Web3. We hope to use TON as a starting point to build an Orbit-based Layer 2 on this non-EVM system.

In just one year, TON has seen the emergence of thousands of small games and other Mini Apps, becoming the fastest-growing public chain in terms of ecosystem and user numbers. However, due to the limited capital volume of TON, with only around $1 billion in TVL, there are few mature DeFi projects. By building a TON Layer 2 based on Orbit, we hope to bring Ethereum and BTC ecosystem DeFi applications and funds into TON, enhancing security while introducing more DeFi applications. This approach can indirectly integrate TON’s active gaming ecosystem into Arbitrum through Orbit, paving the way for Arbitrum’s large-scale adoption. We aim to link Arbitrum with TON and eventually Telegram, bringing more users into Arbitrum.

In short, we aim to provide Ethereum and Bitcoin-level security for TON while attracting more new Web3 users to Orbit and Arbitrum.

4 Likes
12

UPDATE - We are changing this proposal from Constitutional to Non-Constitutional. The motivation is to twofold.

  1. The Quorum for a Constitutional AIP is exceedingly high and votes on snapshot very rarely (if ever) achieve >180m votes, and

  2. There is no amendment to the Constitution or on-chain code. The proposal is instructing the Arbitrum Foundation on whether the Arbitrum Expansion Program should be changed.

The first post has also been updated to reflect this.

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I voted FOR this proposal on Snapshot. I believe this proposal is good for Arbitrum because it drives adoption of our tech stack and because it opens up new revenue opportunities. I believe this proposal is good for Ethereum because it drives adoption of the EVM, which is Ethereum’s most important moat IMO.

14

I voted for this proposal on snapshot. Allowing more chains to adopt the Arbitrum tech and share revenue with the DAO only benefits overall. Arbitrum can get more market share and the DAO more revenue to be sustainable.

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I’m voting FOR this proposal on Snapshot.

Although I believe that past discussions about the ‘Ethereum-aligned’ chain have been constructive, I think the technology should be viewed as agnostic and its demand should be met to benefit the DAO and foster ecosystem growth.

In this regard, I I would like to know if the @Arbitrum Foundation intends for the benefits of this Expansion Program to go to the DAO treasury or the Foundation’s treasury. From the current terms of the license agreement, it appears that the revenue share benefits the Foundation. To move forward with this proposal on Tally, I would like to see a modification of these terms to favor the DAO and to have the payment terms clearly detailed.

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I support the proposal to allow deployments of new Orbit chains on any blockchain. This initiative can enhance Arbitrum’s tech stack adoption and open new revenue streams. It will also promote the EVM, benefiting Ethereum by driving its adoption.

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I support this proposal because it expands the Arbitrum Expansion Program beyond Ethereum, allowing projects to deploy Orbit chains on other networks. This can significantly increase revenue for ArbitrumDAO, enhance EVM and Stylus dominance, and provide greater flexibility for developers. The expansion addresses industry demand and supports Arbitrum’s growth and adaptability in a competitive landscape.

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The funds are sent to two multisigs:

Collection on Ethereum mainnet:

Collection on Arbitrum One:

From there, the Arbitrum Foundation will periodically send the funds onwards to the ArbitrumDAO’s treasury and the to-be-formed Arbitrum Protocol Guild. None of the funds are kept by the Arbitrum Foundation.

1 Like
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We are 100% in support of this. This both makes sense and is also a new revenue option for the DAO and developer guild. A question we have now is, what are going to be the first chain that will be deploying this tech? Are there any chains that have already signaled interest?

Additionally, how scaleable is this tech? Are there going to be issues with too many deployments in the future?

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Customizability and flexibility: Orbit chains allow for permissionless deployment of Layer 3 (L3) or Layer 2 (L2) chains that can be tailored to specific use cases and business needs. This customizability extends to privacy settings, permissions, governance, fee tokens, and more, making them highly adaptable. Because you already know the truth @PGov , the only one truth is that we gone
Leveraging Arbitrum’s ecosystem: By building on top of Arbitrum’s established and thriving ecosystem, Orbit chains can benefit from existing network effects and user base.
Technical advantages: Orbit chains inherit the benefits of Arbitrum Nitro’s technology stack, including fraud proofs, advanced compression, and EVM+ compatibility through Stylus. They also receive all future tech upgrades performed on Arbitrum Nitro.
Performance optimization: Orbit chains feature “elastic block time,” allowing them to produce blocks based on demand. This optimizes costs during low activity periods and improves user experience during high demand.
Strong developer interest: Over 50 projects have already confirmed plans to launch as Orbit chains, including notable names like Xai Games, Deri Protocol, and Hook Protocol.
Simplified deployment: Rollups as a Service (RaaS) providers like Caldera, Conduit, and Altlayer have extended support for Orbit chain deployments, making it easier for projects to launch and manage their chains.
Economic benefits for Arbitrum is the only way , there is no second best here: Orbit chains pay fees to the Arbitrum sequencer, establishing a sustainable value accrual mechanism for the Arbitrum DAO and bolstering the long-term scalability of the ecosystem.
Interoperability and data availability improvements: With upcoming interoperability features and integration with Celestia for data availability, Orbit chains are poised to become even more attractive for projects looking to build appchains on an established ecosystem.

Given these factors, Arbitrum’s Orbit chains are well-positioned to succeed by offering a compelling solution for projects seeking customizable, high-performance blockchain infrastructure within an already thriving ecosystem.

21

I fully support this proposal. It’s a no brainer to give more flexibility to developers using Orbit and at the same time potentially increase revenues for the DAO.