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[[File:Arbitrum.png|thumb|Arbitrum]] | [[File:Arbitrum.png|thumb|Arbitrum]] | ||
Arbitrum <ref>[https://arbitrum.io/] Arbitrum website</ref>is a layer-2 scaling solution for [[Ethereum]] developed by OffChain Labs. | Arbitrum <ref>[https://arbitrum.io/] Arbitrum website</ref>is a [[Layer 2|layer-2]] scaling solution for [[Ethereum]] developed by OffChain Labs. It is an [[Optimistic rollups|Optimistic Rollup]] on top of [[Ethereum]], which allows for lower fees and faster transactions. Arbitrum went live on [[mainnet]] on August of 2021.<ref>https://offchain.medium.com/mainnet-for-everyone-27ce0f67c85e</ref> | ||
It is an [[Optimistic rollups|Optimistic Rollup]] on top of [[Ethereum]], which allows for lower fees and faster transactions. Arbitrum went live on [[mainnet]] on August of 2021. | |||
An Optimistic rollup moves the heavy computation and data storage that would be normally executed on L1 Ethereum off-chain to a new rollup network. Only a small portion of each batch of transactions is ultimately recorded on the mainnet, creating a much smaller computational impact on the L1. Since only one small data portion is registered on L1 and the majority of computation is handled off-chain, fees can be greatly reduced (compared to if the entirety of the transactions were executed on L1). | An Optimistic rollup moves the heavy computation and data storage that would be normally executed on L1 Ethereum off-chain to a new rollup network. Only a small portion of each batch of transactions is ultimately recorded on the mainnet, creating a much smaller computational impact on the L1. Since only one small data portion is registered on L1 and the majority of computation is handled off-chain, fees can be greatly reduced (compared to if the entirety of the transactions were executed on L1). | ||
The currently-live implementation is called Arbitrum One and uses fraud proofs, on-chain calldata availability, a ~7 day withdrawal period, and a special type of node called a ‘sequencer.’ Offchain Labs currently operates Arbitrum's sequencer, which has the ability to control the ordering of transactions. This early-stage centralization is not solely applicable to Arbitrum but all rollups. | The currently-live implementation is called Arbitrum One and uses fraud proofs, on-chain calldata availability, a ~7 day withdrawal period, and a special type of node called a ‘sequencer.’ Offchain Labs currently operates Arbitrum's sequencer, which has the ability to control the ordering of transactions. This early-stage centralization is not solely applicable to Arbitrum but all rollups. | ||
It’s important to note that as promising as rollup technology is, it’s still a very new technology not without risk. Arbitrum One experienced downtime for ~45 minutes in September 2021 when a bug caused a large burst of transactions to overload the system. | |||
'''Arbitrum's unique Fraud Proofs: Multi-Round Interactive (MRI) Fraud Proof.''' | '''Arbitrum's unique Fraud Proofs: Multi-Round Interactive (MRI) Fraud Proof.''' | ||
Arbitrum also uses fraud proofs which, as discussed before, refer to the concept of anyone (with vested interest) being able to track, backtest, and dispute a transaction’s claim within a challenge window. | |||
MRI refers to when both parties (supporter/challenger) go on to resolve the dispute multiple times until the smoking gun is found off-chain. In Aribitrum’s model of fraud proofs, only a referee steps in to make the judgment call on-chain. This means for fraud proofs on Arbitrum, less time is spent on-chain and more transaction fees that would have otherwise been paid are minimized, leading to higher network performance. Additionally, because L2 transactions are not entirely executed on L1, its gas block limit is rendered irrelevant. | MRI refers to when both parties (supporter/challenger) go on to resolve the dispute multiple times until the smoking gun is found off-chain. In Aribitrum’s model of fraud proofs, only a referee steps in to make the judgment call on-chain. This means for fraud proofs on Arbitrum, less time is spent on-chain and more transaction fees that would have otherwise been paid are minimized, leading to higher network performance. Additionally, because L2 transactions are not entirely executed on L1, its gas block limit is rendered irrelevant. | ||
===== Arbitrum vs Optimism ===== | ===== Arbitrum vs Optimism ===== | ||
While both are Optimistic rollups, Arbitrum has some key differences from its counterpart Optimism. One critical difference: Optimism OVM 2.0 is EVM-equivalent, running directly inside the EVM, while Arbitrum One is only EMV-compatible. This reduces code complexity and audit surface for Optimism. Arbitrum's AVM lacks EVM-equivalence because it’s consciously optimized for more compact fraud proofs, but at the expense of implementation complexity. | While both are [[Optimistic rollups]], Arbitrum has some key differences from its counterpart Optimism. One critical difference: Optimism OVM 2.0 is EVM-equivalent, running directly inside the EVM, while Arbitrum One is only EMV-compatible. This reduces code complexity and audit surface for Optimism. Arbitrum's AVM lacks EVM-equivalence because it’s consciously optimized for more compact fraud proofs, but at the expense of implementation complexity. | ||
Another critical difference is Arbitrum puts less data on the L1 as it executes many transactions between L1 postings vs Optimism requires that a state hash is posted after every transaction. On the other hand, Arbitrum executes several transactions before requiring the state hash to be posted. This can account for up to ~4x difference in storage on-chain. | Another critical difference is Arbitrum puts less data on the L1 as it executes many transactions between L1 postings vs Optimism requires that a state hash is posted after every transaction. On the other hand, Arbitrum executes several transactions before requiring the state hash to be posted. This can account for up to ~4x difference in storage on-chain. | ||
Finally, one difference is Arbitrum lacks a native token, while Optimism has just announced one as of late April 2022. It’s not public knowledge whether or when Arbitrum also intends to eventually launch a token, but the general trend in the crypto industry would suggest so. | Finally, one difference is Arbitrum lacks a native token, while Optimism has just announced one as of late April 2022. It’s not public knowledge whether or when Arbitrum also intends to eventually launch a token, but the general trend in the crypto industry would suggest so. | ||
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==Main protocols== | ==Main protocols== | ||
Arbitrum's main protocols are [[DEX|DEXs]] like [[Uniswap]], [[Sushiswap]], [[Balancer]] and [[Curve Finance | Curve]], bridges like Synapse and [[Stargate]] and money markets such as [[Aave]]. | Arbitrum's main protocols are [[DEX|DEXs]] like [[Uniswap]], [[Sushiswap]], [[Balancer]] and[[Curve Finance | Curve]], bridges like Synapse and [[Stargate]] and money markets such as [[Aave]]. | ||
Derivatives trading protocols have also accrued substantial [[TVL]], like [[Dopex]] and [[GMX]] | Derivatives trading protocols have also accrued substantial [[TVL]], like [[Dopex]] and [[GMX]] | ||
[[Category:Layer 2]] | [[Category:Layer 2]] | ||
<references /> | <references /> | ||
[[Category:Optimistic rollups]] | [[Category:Optimistic rollups]] | ||