Recently, the community is attracted to the new Layer 1 such as Sui and Aptos, but forgets that one of the big guys of Layer 2 is Arbitrum, which also has many potential projects that we can follow to have a chance and join early.
What is Shell Protocol?
Shell Protocol is built on Arbitrum, inheriting the competition from this Layer 2 transaction speed and cost along with the security from the parent chain - Ethereum. The direction of the project is to create a platform with tools such as liquidity provision, multi-project Swap Token to become a DeFi Hub for both users and development teams.
How does Shell Protocol work?
Currently, each Liquidity Pool, Token, and Project have different accounting systems and operating mechanisms. Moving information and assets between systems requires a lot of steps along with a large amount of transaction fees. This creates a lot of barriers for retail investors as well as development teams.
Shell Protocol's solution is called Shell V2, using ERC-1155 (Multi-Token Smart Contract) smart contract with open source code to simplify asset movement and linkage between projects.
This solution work by wrapping your assets such as USDC, DAI, ETH into Shell Wrapped Tokens shUSDC, shDAI, shETH respectively and these shTokens can be used in any supported DeFi platform.
Investors or develop teams can deploy assets and build projects on the platform. This means that Shell Protocol will grow the network, the larger the network, the stronger platform.
Shell Protocol will also operate like a separate AMM but the liquidity system is optimized and expanded thanks to the network of deployed projects.
The team also shared that the platform saves about 40 times standard gas fees compared to Ethereum, however this has not been confirmed by either party.
The potential of Shell Protocol
According to L2Beat, Arbitrum is Ethereum's Layer 2 with the largest TVL volume of nearly $2.6 billion, far ahead of the rest. Arbitrum's strengths are currently most obvious in the low transaction costs but high transaction speeds, suitable for building DeFi tools on it.
Shell Protocol is one of the projects that has the potential to become one of the most attractive places for cash flow in the ecosystem because issues are solved such as:
Multi Projects Liquidity
Swap multiple tokens in just one transaction (Multi Token Swap)
Optimization and cost saving
Recently, on the official twitter page of Arbitrum, there was a tweet congratulating ShellV2 on successful implementation. Perhaps the team has also considered the weakness of the platform that has to rely on a network to combine projects, so the first steps are very reasonable.
The above is information about Shell Protocol, because the project has just completed the testnet recently, the tools are still very limited and incomplete. Investors can continue to monitor the project and look for opportunities to participate early to make profits.