(rbitrum) Ethereum is an extremely popular platform for developing decentralized applications (dApps). But in recent years a sharp increase in adoption has pushed the network to its limits, leading to excessively high transaction fees and increasing congestion.
While some believe the best way to scale Ethereum is to edit and update on-chain, others are going their own way known as the Layer 2 scaling solution.
They come in a variety of forms and functions. It was there that the Arbitrum solution began to gain momentum thanks to its novel way of solving problems.
What is arbitrum?
Arbitrum is a Layer 2 solution designed to improve the functionality of smart contracts on Ethereum, increase their speed and scalability, and add data protection features.
Layer 2 is a type of framework that acts as a second layer on top of another blockchain (known as Layer 1). These Layer 2 platforms were developed to expand the functionality of Layer 1 chains – for example by improving scalability or consolidating smart contract functions.
The platform is designed for developers to simply run unmodified EVM (Ethereum Virtual Machine) contracts and trade ETH on Layer 2 while still enjoying excellent security on Layer 1 of Ethereum.
Arbitrum was designed to address some of the shortcomings in current smart contracts on Ethereum, such as: B. poor efficiency and high gas charges. These have made the Ethereum user experience worse and often made transactions expensive.
Arbitrum uses the rollup technique to record batches of transactions sent across the Ethereum backbone and execute them on an inexpensive, scalable Layer 2 sidechain, while leveraging Ethereum to ensure accurate results. This process helps to relieve most of the compute and storage load that Ethereum currently carries and allows many new types of DApps to be opened based on the powerful Layer 2.
Offchain Labs, based in New York, develops the Arbitrum product as well as the suite of scaling solutions. The company was founded by Professor Ed Felten, Dr. Steven Goldfeder and PhD student Harry Kalodner founded. All three are blockchain experts with a passion for making cryptocurrencies more available.
Offchain Labs recently successfully raised $ 120 million in a Series B round from major investors Lightspeed Venture Partners, Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, Alameda Research and billionaire Mark Cuban.
Offchain Labs 3 co-founders
How does Arbitrum work?
Arbitrum belongs to the category of optimistic rollup technology. It enables Ethereum smart contracts to be scaled by relaying messages across multiple smart contracts in the Ethereum backbone and in the Arbitrum layer 2 chain. Most of the transaction processing is completed on Layer 2 and the results are recorded on the main chain, which greatly improves speed and efficiency.
Optimistic means that any validator can post a rollup block and validate other blocks, while rollup describes how public information can be used to rebuild the history. The arbitrum protocol ensures that the code is correct (i.e.
Future versions of Arbitrum will also have two more modes: Channel and AnyTrust Sidechain.
As with many blockchains, individual nodes can choose to participate in the arbitrum chain. Validator nodes observe the state of the chain and complete nodes help aggregate Layer 1 transactions. The aggregators that send transactions to the Layer 1 chain earn ETH rewards, while the rest of the transaction fees are paid from users to other network participants – such as validators – is distributed.
Arbitrum creates a challenge step for roll-up blocks that allows other validators to check the correctness of a block and ask if they think it is wrong. If the ban is found to be incorrect or inappropriately challenged, the fraudulent validator’s use will be confiscated, ensuring that the validators always play fair and suffer consequences if fraudulent.
The platform also has its own custom virtual machine called the Arbitrum Virtual Machine (AVM). This is the execution environment for Arbitrum’s smart contracts and lives on EthBridge – a collection of smart contracts that communicate with the Arbitrum chain. Ethereum-compatible smart contracts are automatically translated to run on the AVM.
What Makes Arbitrum So Unique?
The project aims to provide developers with an easy-to-use platform to launch highly efficient and scalable Ethereum-compatible smart contracts.
But it’s not the first platform trying to break the boundaries of Ethereum. There are at least a dozen other solutions that offer similar functionality. What makes Arbitrum different from the rest?
High EVM compatibility
Arbitrum is considered to be one of the EVM compatible rollups. It is compatible with EVM at the bytecode level, and any language that can be compiled to EVM will work, such as: B. Solidity and Vyper.
This makes developing Arbitrum easy as developers don’t need to learn a new language before building on Arbitrum.
Powerful developer tools
The Arbitrum support team is doing everything possible to lower the barriers to entry when building its Layer 2 solution. Hence, they have compiled the Arbitrum developer documentation and developers can use the existing tool for Ethereum. Arbitrum doesn’t require you to download anything, such as a plugin or a compiler like hardhat or truffle.
As a layer 2 scaling solution for Ethereum, Arbitrum is not only intended to increase transaction throughput, but also to significantly reduce transaction costs.
Thanks to its extremely efficient roll-up technology, Arbitrum is able to reduce the fees to a fraction of what Ethereum requires, while providing enough incentives for validators.
Trade fair debut
Arbitrum has been operating several test networks since October and is currently working on the main network for developers. Unlike many other Layer 2 scaling solutions, Arbitrum has not yet released its native token. Most likely there will be an airdrop for users like Uniswap, 1inch or, most recently, dYdX in the future.
In addition, all interested developers will have time to familiarize themselves before Arbitrum becomes available to the masses. Arbitrum recently committed to over 250 registered development teams based on the developer mainnet to be active for at least two weeks before Arbitrum One is made available to the public.
Arbitrum is currently working on many dApps and infrastructure projects on Ethereum including Uniswap, DODO, Sushi and dozens of others.
At home at home
According to Coinmarketcap