Analysis of the advantages of the expansion gold seed player Arbitrum

Rollup is finally here! With Arbitrum announcing its main web beta on May 29, the Ethereum community is finally about to achieve the long-awaited scalability.

Coin World-Expansion Gold Seed Player Arbitrum Advantage Analysis


Part.1 Insight

Analysis of the advantages of the expansion gold seed player Arbitrum

Rollup is finally here! With Arbitrum announcing its main web beta on May 29, the Ethereum community is finally about to achieve the long-awaited scalability. Our vision is: store the original data on Ethereum Layer1, while the costly execution and storage will be moved to Layer2. At the same time, the security of Rollup is guaranteed by Layer 1, so it is safer than other solutions such as side chains. The in-depth comparison of different Layer 2 solutions is shown in the figure below:

Coin World-Expansion Gold Seed Player Arbitrum Advantage Analysis

The history of Arbitrum can be traced back to 2014. At that time this was only a student project, and Professor Ed Felten was the mentor. From 2015 to 2017, Ed Felten worked as a consultant at the White House, and the project was interrupted for a while. It was only restarted in 2017, when Professor Ed Felten returned to Princeton University, and Steven Goldfeder and Harry Kalodner persuaded him to participate in the project again. Arbitrum has always been a Rollup project, but there was no such term at the time. Next, we will carefully study the Arbitrum Layer2 dispute resolution mechanism, which is the core of all architectures.

Multi-round dispute resolution mechanism

The purpose of Arbitrum has always been to resolve interactive disputes. Therefore, the name Arbitrum refers to the “arbitrator” in legal terms, which means the person who decides the dispute. If someone disputes the result after the transaction is executed, the verifier will use this method of arbitrating disputes to reach an agreement. In multiple rounds of interactive rollup, the program will repeatedly divide N instructions into K parts with a size of N/K until it finds specific execution steps that are controversial. The following is a diagram of the process:

Coin World-Expansion Gold Seed Player Arbitrum Advantage Analysis

Source: Tracer.Finance

In the event of a dispute, L 1 re-executes the last disputed step in the transaction to resolve the dispute and determine the winner of the dispute. The program divides the transaction into multiple steps, and only runs the disputed steps at L 1, reducing the cost of re-executing the entire process at L 1. Another significant benefit is that running smart contracts/transactions on Arbitrum is not restricted by the execution capacity/gas of Ethereum. We only need to publish a state certificate for the entire batch of transactions on Layer1, which reduces the overall cost. cost.

For single-round dispute resolution mechanisms such as Optimism, even if the dispute resolution occurs immediately and the additional time is not included in the multi-round mechanism (the additional time for Arbitrum is one week), L 1 must execute the entire transaction to verify. This means that Layer2 is limited by the gas fee of the Layer1 block. In addition, after each transaction, the state root needs to be published on the chain, which further increases the cost.

One of Layer2’s biggest expectations is low transaction costs. The Arbitrum team also mentioned that they have reduced the gas cost of simple transactions to 2000 gwei. The main cost comes from recording transaction data on Layer1.  Arbitrum compresses the header data and does not need to publish the state root to L 1 after each transaction, thereby improving gas efficiency.

There is an imposed time limit for multiple rounds of interactive dispute resolution procedures, which is one week of extra time for disputes. It is similar to a chess clock where players take turns changing hands. The validator must act within this week, otherwise they will lose in the dispute. This means that the process of resolving disputes in practice will be shorter.

Arbitrum architecture overview

There is a smart contract called EthBridge between Arbitrum Layer2 and Ethereum Layer1. EthBridge judges disputes on the Layer 2 chain on the one hand, and supervises the inbox and outbox of the Layer 2 chain on the other. The Arbitrum inbox contract on Ethereum L 1 is an important part of the Arbitrum architecture. The inbox collects all transactions and sorts them on a first-come, first-served basis.

The Arbitrum Virtual Machine (AVM) reads the inbox contract on the Layer1 chain and executes calculations in a predetermined manner. ArbOS (Arbitrum Layer2’s operating system) runs on AVM and executes smart contracts on the Arbitrum Layer2 chain.

In addition to the important components mentioned above, validators are the main participants in the Arbitrum ecosystem. The validator is the node, which observes the activity on Arbitrum Layer2 and advances the rollup chain state. Note that not all nodes are validators. Verification of the Arbitrum chain is completely without permission. If you want to publish a transaction or raise an objection, participants only need to run a node software and pledge in the block. There are three validators on Arbitrum:

  • Active validator: Continue to follow the Layer 2 chain and advance its state by proposing new blocks.
  • Defensive validators: often follow the Layer 2 chain and only take action when they see a malicious block proposed by another validator.
  • Wait-and-see verifiers: Similar to defensive verifiers, they monitor the Layer 2 chain for dishonest behavior. Unlike defensive verifiers, they will not object to malicious verifiers or verify the correct block, but only alert other verifiers in the system.

Arbitrum verifiers are responsible for promoting the extension and rollup of the chain by staking new blocks. The validator needs to pledge a certain amount of ETH in order to generate blocks on the rollup chain. Once a token is pledged on a block, the validator cannot revoke it until the block is confirmed. If another validator disputes a block, they should propose the version of the block they think is correct and mortgage it. According to the result of the dispute mechanism, the winning verifier will get part of the bet of the dishonest verifier, and the remaining amount will be burned.

The pledge deposit amount on the block is dynamically adjusted by the agreement itself. Arbitrum sets a basic pledge parameter. This base amount will be multiplied by a coefficient, and if the speed of the chain slows down due to an attack, this coefficient will increase exponentially.

Coin World-Expansion Gold Seed Player Arbitrum Advantage Analysis

Source: Arbitrum Official Documentation

In order to better understand the Arbitrum mechanism, let us look at the life cycle of Arbitrum transactions:

1) The user sends the transaction to the Arbitrum inbox smart contract on Ethereum Layer 1.

  1. These transactions are executed by AVM on a first-come, first-served basis.
  2. Enter the transaction in the inbox to enter the Arbitrum Layer-2 execution process.

2) The verifier on Arbitrum Layer-2 reads these transactions in the inbox and executes them together in a deterministic way

  1. Once the transaction enters the inbox, anyone viewing the inbox will know the result of the transaction.
  2. This means that once a user’s transaction reaches the inbox, it is the final result on both Arbitrum and Ethereum Layer 1.-End point: the point in time when everyone knows the result of the transaction.-Verification point: the point in time when the Ethereum layer 1 verifies the correctness of the transaction.

3) Subsequently, the validator on Arbitrum will propose a Rollup block containing the execution of the user’s transaction.

  1. At this point, everyone who follows the Arbitrum chain already knows whether the block is correct.
  2. Once the rollup block is generated, there will be a week-long dispute challenge until the transaction is confirmed on Ethereum Layer-1.

4) After the 1-week dispute window, if no one disputes the correctness of the transactions in the block, the block will be confirmed by Ethereum Layer1.

One important point that needs to be emphasized is that the transaction from Layer 1 to Layer 2 will be confirmed soon, similar to the normal Ethereum Layer 1 transaction. However, for transactions from Layer 2 to Layer 1, there is a one-week dispute period before Layer 1 confirms the transaction. Although the Ethereum chain only knows the correctness of the rollup block after the one-week dispute period, due to the certainty of the Arbitrum virtual machine, once the transaction enters the inbox contract, everyone who observes the second layer already knows the result.

Another important point to note is that Arbitrum does not currently have a consensus agreement. In the proof of equity, the majority of verifiers can force the confirmation of the correct state. In contrast, Arbitrum has a proof of correctness. Even only one honest node (1 out of N) can prove that most malicious nodes are wrong. In the final analysis, it is the dispute resolution algorithm that determines who is right and who is wrong, regardless of the majority of votes.

 Arbitrum progress

Arbitrum entered the testnet stage on October 4, 2020, and deployed the Abitrum smart contract on the Ethereum mainnet on May 29. Since the first release of the testnet in October, they have received more than 300 team requests to access developer releases.

Coin World-Expansion Gold Seed Player Arbitrum Advantage Analysis

Currently, more than 700 accounts have been created and 500 contracts have been deployed on the Arbitrum One mainnet beta. There is already a large and growing number of events on Arbitrum One.

Unlike other Rollups in the field, Arbitrum does not have a waiting list of projects, everyone can access it and can develop on this basis. Arbitrum has also successfully attracted top projects. Some of the projects announced on Arbitrum include Uniswap, Sushiswap, MCDEX, DODO, Biconomy, etc. It also integrates leading infrastructure providers such as The Graph, Etherscan and Chainlink.

in conclusion

Rollup is very safe and can be integrated with Layer1. It is one of the most promising solutions for Ethereum expansion. Rollup also has different solutions, including the widely discussed optimistic rollups and zero-knowledge solutions. We believe that in the near future, Rollup’s competition will continue. This open and transparent competition will benefit the entire ecosystem.

Due to the multi-round interactive dispute resolution mechanism, Arbitrum has great advantages in gas limitation and the virtual machine design of the Layer2 chain. Although the jury is still inconclusive, it can already see its potential and Arbitrum will gain a lot of adoption. However, in the end, no matter who is the winner of the Rollup competition, the Ethereum ecosystem will benefit from it. This is indisputable.

We believe that Arbitrum will greatly help Ethereum’s maximum scalability. The Arbitrum team has been working hard for the past few years, and now it seems that they will succeed in leading the market. Judging from their open development methods and a large number of partnerships, the launch of Arbitrum was a great success.


  • Introducing an arbiter One: Our beta mainnet
  • An arbitrator official
  • Inside arbiter ‘- Harry Kalodner
  • ZKPodcast: Diving into Arbitrum’s Optimistic Rollup
  • Awards in under 10 minutes

Posted by:CoinYuppie,Reprinted with attribution to:
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