Notional CEO: Why is Arbitrum the Layer 2 platform of choice for building DeFi protocols?

Notional CEO reveals why Arbitrum was chosen as Layer 2. Arbitrum stands out with its strong DeFi ecosystem, steady product progress, and user culture that closely matches Notional. Its leadership in product innovation and security, as well as its focus on DeFi, make it Notional’s platform of choice, boding long-term growth potential for both parties.

Notional CEO: Reasons to choose Arbitrum

With the release of Notional V3, the Notional protocol will debut on Layer 2. Launching on L2 has the potential to expand Notional’s usage, expand Notional’s offering of leveraged strategies, and facilitate protocol growth.

In an ideal world, if the Notional team had unlimited resources, Notional would exist on every L2. But in practice, limited resources mean we need to choose one in the near future. Notional’s success depends on building a thriving ecosystem with other protocols, and each integration takes time and effort. We can’t do it in too many places at the same time. We need to focus on one L2.

Focusing on one L2 means we need to pick the right one. If our chosen L2 fails to grow its ecosystem and user base, that failure will impact Notional’s growth. Our choice of L2 must be highly utilized today, and must be in the future, and must have a large user base that finds Notional’s offering attractive.

Why did we choose Arbitrum(💙,🧡)

We evaluated our selections using three main criteria:

• Traction: Does this L2 have significant usage and a strong DeFi ecosystem?
• PRODUCT: Is this L2 secure, and is the development team making steady progress in continually enhancing and decentralizing the technology?
• Culture: Is this L2 user group suitable for Notional’s products?

On all three criteria, Arbitrum is the clear leader. That doesn’t mean it’s the “best” L2, or that any other L2 is bad. But it does mean that Arbitrum is Notional’s best choice right now. Let’s see why.

Traction

Arbitrum is the leading L2 of the metrics Notional cares about. Arbitrum has the most TVL and the largest DeFi ecosystem.

Here is the total TVL comparison on L2 beat:

L2Beat

Here is a TVL comparison of the DeFi ecosystem for each chain on DeFiLlama (Arbitrum is green):

Layer2 TVL

The clear traction Arbitrum has gained in its L2 and DeFi ecosystems makes it a safe choice over Notional.

product

Arbitrum has always been a leader in products. This may be one of the main drivers of their success. They are not the first rollup to process transactions, but they are the first L2 to allow permissionless access. **

Since then, their lead over optimistic rollup peers has only grown. From L2 Beat, Arbitrum’s “risk pizza” is mostly green with no red.

Arbitrum’s recently announced BOLD furthers their progress and provides fully permissionless state verification. This product improvement will strengthen Arbitrum’s position as the most secure L2. It also demonstrates their ability to release upgrades faster than their competitors to improve their product and benefit their DeFi ecosystem.

culture

Arbitrum’s user base is very focused on DeFi and yield. This works for us. Notional’s leveraged products are best suited for the active user base who are willing to take some risk in order to maximize their returns using leverage.

We attribute this culture to the hands-off and neutral approach that the Arbitrum team took with their L2. In our opinion, the Arbitrum team has been focused on their product and has not given a particular preference or picked a winner.

We believe the Arbitrum team’s neutrality and focus on product rather than marketing has helped create a self-reinforcing organic community of users and projects. Arbitrum is a strong team and they attract strong projects. This is good for Notional as it opens up more opportunities for protocol integration and makes Arbitrum a good bet for long-term growth.

Start on Arbitrum

The release date for Notional V3 on Arbitrum is fast approaching. We’ve been putting the finishing touches on our smart contracts and Notional V3 UI for the past few weeks, and we’re almost ready to launch our invite-only beta to the public on Arbitrum.

We are very excited to reveal what we have built and open access to the unprecedented opportunities for leveraged gains we will provide. Choosing an L2 is a big decision, and developers now have more options than ever before. We believe Arbitrum’s traction, their commitment to the product, and their community’s DeFi and decentralized culture make them the best L2 choice for Notional. We are excited to bring Notional V3 to L2 on Arbitrum!