On August 31, Ethereum layer-2 scaling solution, Arbitrum One deployed the mainnet.
Offchain Labs, the creator of Arbitrum, also announced that it has raised $100 million from a consortium of investors led by Lightspeed Venture Partners.
The following day ETH went past $3500 for the first time since May.
What does Offchain Labs do?
The startup specializes in Ethereum scaling. Since DeFi began growing exponentially, Ethereum’s network started witnessing congestion. In this situation, layer-2 solutions have become imperative to scale Ethereum.
It has a product called Arbitrum One which uses Optimistic Rollups to scale the Ethereum network.
Arbitrum One is a developer-friendly platform such that around 400 projects have been onboarded to it. Some of the high-profile names are SushiSwap, Uniswap, AAVE, and MakerDAO.
It is EVM compatible, so developers don’t have to make any significant changes to start using the service.
The tech was first developed at Princeton University. This YouTube video shows the first discussion regarding it back in early 2015.
How does Arbitrum One work?
Arbitrum is a layer-2 scaling solution using Optimistic Rollups. It can improve the capabilities of Ethereum smart contracts by boosting their speed and scalability while securing them through Ethereum’s main chain.
What are Optimistic Rollups?
They are mechanisms that do not run on Ethereum’s base layer but on top of it. This enables running smart contracts at scale while still being secured by the Ethereum chain’s consensus and security.
They take some of the processing work of the main Ethereum chain intending to improve performance and speed.
As its name suggests, the transactions processed through Optimistic Rollups are seen positively. Ethereum always takes a given batch of transactions as legitimate.
It rejects a transaction only if someone submits a valid claim that the given transaction(s) is fraudulent (a fraud-proof).
The Funding Round
Offchain Labs has raised around $100 million as mentioned above. The investors’ consortium consisted of Lightspeed Venture Partners, Pantera, Polychain, Redpoint, Ribbit, and other investors in a Series B Round.
They were elated on joining the team.
“Thrilled to continue our support today for Steven Goldfeder and the Offchain Labs Arbitrum team. We are still in the early days of DeFi, and see a future where the number of users scales from single-digit millions to billions,” said Ravi Mhatre, founder of Lightspeed Venture Partners.
Amy Wu, Partner at Lightspeed Venture Partners, opined, “A lot has been written about how L2s work and the differences between optimistic and zero-knowledge roll-ups, and which are theoretically better. In deciding to lead Offchain Labs’ Series B, we focused on the most important thing: what is easier and better to use for developers.”
The Mainnet Launch
With the mainnet launch around $2.9 million (up 305%) of value is locked in Arbitrum as per L2Beat.
“Since we opened Arbitrum One to developers in May, we’ve sent over 400 teams mainnet access instructions and have seen dozens of teams complete their deployments,” as announced by Offchain Labs.
Arbitrum One has been officially released, but it is still in the Beta stage. The startup has stated that it wishes to closely monitor the launch and maintain the ability to provide fast upgrades and even pause the system should the need arise.
Gradually, it will be completely decentralized. Until that happens it will remain in ‘Beta’ state.
The speed limit currently is 80,000 arbgas per second. It is roughly equal to the current capacity of Ethereum L1. Speed Limit might be increased in the future as the system stabilizes over time.
“In the event that anomalous activity or a potential security incident is detected on the network, we may pause the network.” It will secure the funds.
It takes roughly a week for withdrawals to be confirmed. As a result, the project gets time and confidence to make sure the funds remain in safe hands.
They have also announced a bug bounty program with a maximum bounty of $1 million
The project aims to improve stability and performance, and gradually increase the transaction cap over time. Also, more features will be added as the journey progresses.
News recommendation: Polygon has acquired ZK-rollups project Hermez for $250M