A simple understanding of the new Ether Layer 2 solution Arbitrum

Arbitrum is becoming the current meat and potatoes of Ethernet L2.

Recently both Uniswap and Sushiswap are planning to use Arbitrum’s L2 solution, which makes Arbitrum the Ether L2 solution of interest. So, how to understand Arbitrum simply?

Arbitrum is also the rollups series of L2 solutions

There are quite a few Ethernet Layer2 solutions, and the most popular one is the Rollups series.

Arbitrum is also a solution of Rollups series. These solutions basically put the security on the Ethernet chain, while the computation and storage are executed off-chain. In simple terms, participants submit their transaction data to the EtherChain and users can view the transactions, although the computation and storage of the transactions are performed off-chain. arbitrum periodically sends a complete state hash containing what happened on arbitrum to EtherChain, and this hash is placed on the chain as a result, achieving tamper-evident and finality.

Comparatively speaking, Arbitrum is similar to Optimistic Rollups in terms of framework ideas, and in terms of result verification, both belong to the category of fraud proof, while ZK Rollups belongs to the category of cryptographic validity proof.

In terms of premise assumptions, Fraud Proof Rollups assume that the results submitted to the chain are available, and anyone can extract and execute the transaction data of Layer1 to check whether the contract is executed correctly by comparing the status. The cryptographic proof class Rollups uses a mathematical method to achieve validity through zero-knowledge proofs, which are inherently impossible to fake. Thus, cryptographic validity proofs are active proofs, while fraud proofs are passive proofs, where disputes arise when people disagree with the result and arbitration is required.

On the whole, ZK Rollups are more secure and achieve finality faster, which means its extraction time is faster and it is more suitable for scenarios such as money transfers. In contrast, both Optimistic Rollups and Arbitrum’s solution have a challenge period, which needs to end before finality can be confirmed and coins can be withdrawn, which is its shortcoming. However, ZK Rollups have to generate cryptographic proof of validity, which is computationally expensive and takes some time to land and mature.

In the long run, ZK Rollpus is likely to be the ultimate solution, but it takes longer for ZK Rollups to mature and land, while the scaling needs of Ether are more urgent, as can be seen from the rise of smart chains this time. the slower landing of ZK Rollups gives opportunities to Optimistic Rollups and Arbitrum.

Therefore, in the short to medium term, Proof of Fraud Rollups (Optimistic Rollups and Arbitrum Rollups) have a quicker chance of landing. Fraud proofs are inherently “optimistic”, assuming that all submitters are good unless proven guilty. As long as a verifier exists, it is safe to submit fraud proofs. Therefore, the assumption that there is an honest verifier becomes important. Only one verifier is required to submit an online proof of fraud, and there is a week (or more) long window of time for proof of fraud, which also leads to slow final confirmation times and long withdrawal times.

In general, there are advantages and disadvantages to both Proof of Fraud and Cryptographic Proof of Validity Rollups; ZK Rollups are non-interactive and solve the problem mathematically, while Optimistic Rollups and Arbitrum Rollups are both interactive. In this sense, Optimistic Rollups and Arbitrum Rollups are similar, although they also differ in their specific paths.

Arbitrum is a multi-round interactive Rollups scheme

From the above, Arbitrum and Optimistic are Rollups in the same category of fraudulent proofs. The core questions of both schemes are: How to verify the correctness of the result? Will someone send a malicious proof? Therefore, both have challenge mechanisms. The verifier can send an assertion to the chain to dispute it. If the assertion is false, it loses its pledged margin asset.

The main difference between Arbitrum and Optimistic is in the way disagreements are resolved. What happens when a verifier submits a rollup block to L1 and someone thinks it is incorrect?

Arbitrum uses a multi-round interactive protocol to resolve disputes, breaking down large scale disputes into smaller ones until the most critical one is found, and then the Ether contract is used to determine if it is correct. By splitting disputes, Arbitrum tries to achieve a more efficient solution.

Participants in Arbitrum can pledge margin to assert that a certain state will eventually be confirmed. If the assertion is incorrect, the user’s pledged margin is forfeited. Two users pledge on different squares, which means that only one of them can be true. To prevent attacks, disputing assertors need to pledge their margin assets to prevent them from committing mischief.

In its initial design, the Arbitrum protocol uses the practice of handling disputed assertions one at a time. A participant makes a disputed assertion, and the disputed assertion has a challenge period during which anyone can challenge the disputed assertion. If no one challenges it, then the disputed assertion is considered valid.

However, there is a bottleneck in this one-line advancement model. Activating one disputed assertion at a time is inefficient and the VM process is limited. Also, the evil-doer can deliberately delay the VM by challenging the disputed assertion. even though it requires paying pledged funds.

Therefore, in the new design, Arbitrum can handle multiple disputed assertions at the same time, not in a linear fashion. The evil-doer mitigation process is much more difficult to implement. Currently Arbitrum uses multiple contested assertions to be processed simultaneously, one assertion at a time by one pledge, and multiple assertions can be processed simultaneously by different pledges.

As assertions are confirmed as valid, the status of their VMs advances. In general, people choose to behave honestly because this ensures that their pledge margin will not be forfeited. There is no need for people to pledge their assets to the wrong branch unless there is a malicious reason to attack.

To achieve the trustless feature, in Arbitrum’s design, any honest participant can advance VM correctness and progress. If a participant always pledges on the right branch, the TA will win all disputed assertions. If others disagree, they will only lose their pledge margin. Only honest participants together can be protected from penalties.

A simple understanding of the new Ether Layer 2 solution Arbitrum

(Alice and Bob pledged on different branches, from Arbitrum’s Ed Felten)

If Alice’s assertion in the above figure proves to be correct, then Bob’s pledged margin asset is lost, while Alice benefits.

In single-round interactive Rollups, the assertion includes the result of each call, and the challenger points to the particular call with the wrong result in the assertion. The on-chain contract simulates the challenged call and checks for errors. If there is an error, the entire assertion is cancelled and its asserter loses the pledged margin. If the challenge window expires without a successful challenge, the assertion is accepted and has finality.

In the case of Rollups with multiple rounds of interaction, there is also a challenge time window period, and there are multiple rounds of interaction between the asserter and the challenger, with the on-chain contract acting as the referee, which decides who is wrong. The main consideration in the design of multi-round interactions is to minimize the on-chain work to resolve disputes. The on-chain workload is minimized by having multiple rounds of interactions between the challenger and the asserter.

Single- and multi-round interactions are essentially a balance between in-chain cost and dispute resolution time. Both single- and multi-round interactive Rollups need to write all calls to the contract and its data to the chain, the difference is what they need to submit to the chain as part of the assertion. The single-round interaction model requires simulating the full call on the chain, which is a bit more expensive in terms of cost. Multi-round interactions, on the other hand, can be subdivided, can narrow down the scope of the dispute, and write relatively less data to the chain, making it cheaper to execute on the chain. However, it is not without drawbacks, as its determination increases the number of rounds and increases the time.

In addition, the Arbitrum multi-round interaction model may be exposed to latency attacks. Since the system is trustless. Malicious attackers can delay the process, but of course, there is a cost for them to do so, which is that their pledge margin will be forfeited. It is also important to note that malicious actors cannot prevent honest participants from consistently building honest branches, nor can they prevent honest participants from getting final confirmation on honest branches. What they can do is by pledging margin on the wrong branch and delaying the confirmation of the honest branch in the chain. They can create multiple disputed assertions, and if there are enough honest participants, they can simultaneously respond to these disputed assertions and capture the attacker’s pledge margin. That is, the more honest participants there are, the more pledged assets an attacker needs to perform a deferred attack, and the more difficult it is to attack.

In addition, in Rollups with multiple rounds of interaction, a valid “assertion” can be achieved that becomes “trustless finality” and anyone can be sure that its final confirmation is inevitable. To ensure their own finality, users can participate in the protocol to defend the assertion, even if acting alone, and drive their finality to occur.

If there is no challenge, multiple and single-round interactions have similar confirmation rates, and if there is a challenge, a multi-round dispute takes a little longer. In this respect, single-round interactions have an advantage. Single-round interactions will not allow confirmation delay attacks, while multi-round interactions have the benefit of smaller on-chain data and can handle contracts that break the ethereum gas limit (computation and storage).

Rollups in the Proof of Fraud category have a certain time period in terms of final confirmation. Therefore, there is no way to reach fast finality for transfers via Arbitrum as in the ZK Rollps solution. Its possible solution is through the intervention of a third party. The third party could transfer its funds to the user immediately, but the user would also have to pay an early withdrawal fee. Generally, the third party believes that the undetermined transfer will definitely materialize and the third party will pledge a margin on an honest result. Since anyone can transfer funds to a user who needs to withdraw them quickly. Then, a market also exists that will result in fees being in equilibrium and not being too high or too low.

Arbitrum’s EVM compatibility

Arbitrum tries to be fully compatible with Ether, compatible with EVM, without having to rewrite the program. Being fully compatible with Ether, this is something we saw the power of on the smart chain. This is the most important move it can make to smoothly embed into the current ecosystem of Ether.

The dApp developers write their smart contracts in Solidity language and these smart contracts are compiled into Arbitrum VMs that can be run on Arbitrum Rollups.

Arbitrum’s Progress

Arbitrum technology is currently launching Arbitrum One. Arbitrum contracts are deployed on the Ethernet mainnet, have started to accept projects, and are currently in the mainnet testing phase. According to Arbitrum, over 250 teams have applied for access and it is open to all developers. Over the next few weeks, more and more DeFi projects can be seen entering the Arbitrum ecosystem.

Some of the key players in the Etherscan ecosystem, such as Etherscan, are also currently supporting the Arbitrum One chain.

Etherscan and L2’s landing

Interestingly, Arbitrum has no native token and uses ETH as fuel, and all expenses are paid using ETH, which is also good for ETH, not to mention how much demand it will have for ETH in the future.

For now, Ether’s scalability needs a combination of long and short-term hits to meet its rapid growth, especially with the explosive growth of DeFi and NFT. In the long run, L2 may be the ZK Rollups to win, but it may take longer to digest due to its high cost and lag in landing. Arbitrum and Optimistic Rollups, on the other hand, may land sooner, and while their extraction time is long, they are not insurmountable. In addition, growing in practice may also give birth to new inspirations.

In addition to the gradual landing of L2, with the possible launch of EIP-1559 in July this year and the possible PoS at the end of the year, 2021 is destined to be an unusual year for Ether.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/a-simple-understanding-of-the-new-ether-layer-2-solution-arbitrum/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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