Arbitrum Nova : is "Ultra-Low Cost" worth the compromise?

In today's video, we are going to take a look at Arbitrum Nova. And this is actually quite exciting because this is built with Ethereum in mind. It's actually an Ethereum scaling solution, but it's also super, super cheap. Not regular, you know, 40 cents, 50 cents cheap, but like 5 cents and even less in the future cheap in terms of sending a transaction. So if you're interested in where this type of technology can go, especially making transactions ultra cheap, and this will be applied for applications like gaming, NFT trading, pretty much stuff that people actually want to use and don't want to break their bank accounts using. This is the blockchain you need to pay attention to. The best part about this is also it's built by the Arbitrum team and it's built on top of Ethereum. It still actually sends checkpoints to Ethereum and it's actually super easy to bridge from Ethereum to Arbitrum Nova. In fact, I just did that prior to making this video and it's actually like almost around $6 to bridge to Nova. But once you're on Nova, most transactions cost 5 cents or less. So yeah, that's pretty enticing. Nice. So in this video, we're going to take a deep dive into Arbitrum Nova and also its ecosystem, like what's being built on top of Nova. But I actually feel like this is a gem right now to explore because it's really solid tech. Once it engages that Ethereum ecosystem of just blowing the hell up. So anyways, guys, let's take a deep dive before we look into it. This video is not sponsored by Arbitrum, but it is sponsored by Bybit. Bybit is a top cryptocurrency exchange. And now they are listing new coins the fastest with the most volume, which is pretty insane if you want to get in on all that crypto action. If you do want to join the Bybit exchanger, it is a limited time offer, which is 50 free US dollars. If you do the first KYC and you load more than $100 into the exchange. If you're interested, sign up with the link down below and you'll automatically get in this offer. Remember, it's only for the first 100 people to do so. So what are you waiting for? To start off this video, let's take a quick look at what Arbitrum Nova is and what it's for. But to explain that, let's first take a look at some transactions. I mean, if you take a look at Ethereum right now, this is just a typical Ethereum swap transaction. It's costing around $15 right now. $15. That's ridiculous. That can buy you a whole meal, entire meal. And when you switch to Arbitrum Nova, that same transaction is really only going to cost you $0.05. Now, that's a huge saving from $15 to $0.05 in terms of transactions. That's like a huge unit change already. Well, there is actually a catch. Arbitrum Nova is what people regard as layer 3 right now. It not only uses Ethereum as a checkpoint, but it also uses a separate data layer and it doesn't store data on Ethereum. To continue on, I think we need to really define purpose because there are some sacrifices done for Nova that it relies on trusting at least two parties of the network. All right, that's the quick kind of the Achilles heel. If everyone is dishonest on Arbitrum Nova, this wouldn't work. But if there's at least two honest people here, their system will work and the funds will be secure and transactions will be ultra cheap. How this works is that this uses a protocol called AnyTrust. All right. It's a little bit too over the top to go into detail. But the essence here is that instead of traditional kind of BFT, having to trust everyone or having to trust at least two thirds of people like in the BFT system. What AnyTrust does is it allows this system to form trust as long as there are two members that are trustworthy. This means, and I think this is quite easy to achieve if this chain is designed for something like gaming or for social, where game developers would have the incentive to keep servers and keep them trusted. If there's an incentive, there's a way. And well, precisely, this is what this chain is built for, which is it's built for video games. It's built for social projects. It's built for different applications that are for kind of your everyday casual user. Now, I feel like, I think a lot of people who are pure maxis are going to say, you know, Michael, why are you doing this? Right. I mean, are you going to be that cheap? Are you going to sacrifice full decentralization and settle with some form of centralization for this? And I say, if it's for gaming, absolutely freaking yes. I actually want to say that this is a viable compromise, because if you're thinking about mass adoption and you're thinking about people who are transferring items in video games, especially if they're a casual player, they don't want to spend $15 on transaction fees. In fact, most of their items are only worth $15 or less. Right. So I don't think they care that much about full decentralization. They probably care more about if a certain transaction fee is more than their entire net worth or the net worth of their items in the game or in a social platform. And I think what is really powerful of Arbitron Nova is that it's specifically designed for all these mass uses where people require very cheap transactions. I think this is a case where this chain knows exactly what it's trying to deliver and it delivers upon that. This is why I think it's important to pay attention to Arbitron Nova. It's just because of the pure cheapness of transactions. And you're probably going to say here at this point, Michael, you've talked about other chains that have very cheap transactions before. What else is interesting about Nova? Well, what's interesting is that Nova is built directly on top of Ethereum and it uses Ethereum as its base currency. I think this is also quite important because whenever there's a bear market, everyone rushes back to ETH. That's just a fact. And that's because ETH has the most number of developers. It has the largest ecosystem of people with money, which is why NFTs and Ethereum works. Because there are people with tons of EFL in their wallets that want to buy digital JPEGs, right? Or whatever they want to buy on a space. So there are a lot of rich people on Ethereum. And in fact, that's why everyone kind of reinforces Ethereum when the bear market hits. So what makes Arbitrum Nova powerful is that it uses Ethereum as a base currency. It's bridge to Ethereum. It still communicates and uses the Ethereum chain to checkpoint once in a while, but it doesn't transfer all data. So unlike Arbitrum 1 and unlike other layer 2 solutions, it doesn't checkpoint all the data back into the Ethereum chain, which is why it allows it to save up even more. I actually did a quick comparison. So basically doing a swap on Arbitrum 1 and Arbitrum Nova. So roughly speaking, Arbitrum Nova is around 5 cents at this current point and Arbitrum 1 is around 40 cents. So you can actually see the price difference here when it comes to being cheap and ultra cheap. So I actually do believe that this is actually very important for a full Web3 experience where you have lots of people who kind of value cheap transactions. Now next up, what is inside the Arbitrum ecosystem that you need to pay attention to? Well, Arbitrum Nova actually doesn't have too much development right now, which is actually good, which means we're super early onto this network. So right now, Sushi Trump has bridged over, but also there's a native project. And these guys are people that I'm quite familiar with. So full disclosure, there are people developing something called ArbSwap, which is native to Arbitrum and very active on Arbitrum Nova. So what they offer right now is they offer the ability to swap coins on both Nova and One and something like the one I showed you earlier. You have a 0.1 transaction fee transfer from Ethereum to USDC. If you do a swap like this, literally it's going to cost you 50 cents. So that is actually quite insane. Now, I think that there's a lot of potential on this network. I feel like there's a lot of potential to grow, especially when it comes to GameFi. Now, when it comes to using a platform like this, when it comes to this ecosystem, I definitely feel like there's a lot of room to grow and there's a lot of room to pay attention to into the space, especially with DeFi heating up. I've been talking to a lot of people who are very, very deep into DeFi right now. And I think the next DeFi wave is going to surprise everyone. Once people have access to quicker chains, quicker transactions and a better platform to try to trade, it's going to heat right up. So I'm actually pretty interested for the entire ecosystem overall. I actually really like what's happening with how scaling is happening right now on Ethereum. And I hope you guys can check out Arbitrum Nova. I actually was quite surprised, you know, I'll be honest. When I first heard there's like two Arbitrum chains, I'm like, why guys? Why do you want to create the confusion? But I see the vision. I'm fine. So guys, thank you guys so much for watching this video. I hope it's helpful for you guys to understand what is happening with Arbitrum. And if you like this video, make sure you like and subscribe to this channel. And otherwise, yeah, look to see you in the future.