Bob and Alice welcome Arbinauts to Shell World. It’s the beginning of a beautiful friendship.
Shell v2 is almost here. If you’ve seen the current testnet, it may at first look like a DEX, but even brief interaction with its features (such as multi-token swaps) reveal a powerful new type of protocol. Its Ocean accounting system allows builders to seamlessly compose transactions across linked DeFi primitives (like lending pools, AMMs, marketplaces, etc.), batching complex trades into a single gas-efficient transaction. Its Proteus AMM engine rethinks the process of designing bonding curves, using powerful geometry to create more precise, capital-efficient pools than what’s possible with Uniswap v3 or Curve — all without having to write a single line of Solidity code.
To the end user, the surface result is a sleek and powerful DeFi platform with unbelievable potential and powerful network effects. Of course, if you’ve been with us for a while, you probably know that already. The question now is, “When do I get to try it?”
Luckily, the answer is close at hand. Shell v2’s core code has been audited, and we will announce an official launch date soon. Exciting off-chain features like Shell Points are coming together, and we’re excited to share all of those with you in additional blog posts over the next few weeks. We’re polishing the website, setting up the initial pools, and preparing to deploy on mainnet.
So, which mainnet?
As you may have guessed, the answer is Arbitrum. We launched the Government Toucans on Arbitrum in April, and we’ve had the Shell v2 testnet deployed on Arbitrum Rinkeby for the past four weeks. We’re happy to report that the testnet has proved robust. We’ve already implemented a lot of UI tweaks based on user feedback, and we’re very grateful to everyone who commented in our Discord #testnet channel with substantive notes.
As we’ve said, we have no plans to retire the testnet. To the contrary, the testnet will remain active, and it will generally receive new features a few weeks ahead of when they go live on mainnet. This will allow us (and you) to experiment with new features and evaluate their potential in a low-stakes environment. It will also give you a preview of what’s to come.
Why not deploy on Ethereum mainnet? Well, a lot has changed since Shell v1 was first deployed there. Layer 2s (L2s) have matured significantly as a sector, and rising usage of Ethereum mainnet has pushed gas fees consistently upward over time, the current bear market notwithstanding.
Why an L2 over a sidechain? Two reasons. First, Ethereum is the most mature from a security standpoint. There is no substitute for longevity when it comes to assessing security risk. Second, Ethereum is where nearly two-thirds of the assets in web3 are located at the time of writing. Therefore, other L1s have to bridge assets from Ethereum to their chain. Even if these sidechains are secure, oftentimes their Ethereum bridges are not. As of writing, over $1 billion has been stolen from bridges already.
L2s solve both problems. Because they are built directly on top of Ethereum’s L1, they inherit Ethereum’s security. Furthermore, bridging between an L1 and an L2 is far more reliable than bridging between Ethereum and a sidechain.
From another perspective, it makes sense to combine Shell and Arbitrum’s gas-saving effects to deliver as much efficiency as possible. Our goal with Shell Protocol is to connect web3 projects in one large network, making it simpler and more affordable to batch complex transactions. It makes sense to combine Shell’s composability with Arbitrum’s gas savings. Not to mention, Arbitrum has extremely low latency, giving our desktop app a smooth user experience. This in turn increases our attractiveness to users and builders, helping bootstrap the development of the Shell ecosystem.
We see Ethereum, Arbitrum, and Shell together as an ideal ‘dev stack’ for the smart contract deployments of the future. With Ethereum’s security, Arbitrum’s cost efficiency, and Shell’s networked composability, our builders are ideally positioned to rise to the top of the next wave of DeFi.
Now, why Arbitrum in particular? If we’re looking for a rollup on which to deploy Shell v2, the leading options are either optimistic or zero-knowledge proof rollups. While both systems have merit, optimistic rollups appear to us as the more developed and mature of the two. At this point, the field grows slim, and Arbitrum is certainly a sector leader in the field of optimistic rollups for Ethereum.
The Shell team was initially drawn to the Arbitrum project because of its longevity, development ethos, and unique approach to multi-round fraud proofs. Once we approached the Arbitrum team, we quickly found a group of people committed to nurturing a diverse ecosystem of bold, independent developers. We want the same for Shell, and we feel aligned with Arbitrum’s goal of lowering fees while maximizing the utility and efficiency of the Ethereum network.
If you want to participate in the Shell v2 guarded launch, it might be a good idea to start looking into Government Toucans of your own. Shell v2 will begin with a closed allowlist based on soon-to-be-announced criteria. Over time, it will expand in access and sophistication until we achieve a full public launch.
Shell v2 is ultimately a utility, a system architected to increase the scope of what’s possible on the EVM. Wherever Solidity code is run, we want Shell Protocol to someday be there helping builders achieve their dreams. For now, we’re concentrating our efforts solely on Arbitrum, a platform with a wonderful community and sure-minded team at its helm. We can’t wait to see what happens next.
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