Odyssey is coming, do you really understand Arbitrum?

After the collapse of the Luna/UST algorithm stablecoin, the market continued to fall, and then a series of liquidity crises occurred in 3AC, Celsuis, BlockFi and other institutions. Under the multiple blows of the crypto market, BTC has fallen below the high point of the last bull market, and many altcoins have also lost most of their market value.

At this moment, there are many voices of doubt in the circle, many people are starting to sway whether to quit the circle, and many people are questioning the future of Crypto and web3. In the rounds of decline, under the doubts of countless people, many people He was washed out of the car and left Crypto for a long time. But historical experience shows that only those who stand up to self-doubt and keep thinking and building on the industry will finally enjoy the dividends and fruits of Crypto’s development.

Changes in TVL of Layer2 Ecological Projects

Since Vitalik released the “Rollup-Centered Ethereum Development Roadmap”, keen people have realized that Rollup will serve as the center of Ethereum’s application and ecology, carrying the functions of Ethereum’s execution layer, which is the future trend of Ethereum. It is also the infrastructure of the future Metaverse .

Chinese version of the Ethereum development roadmap centered on Rollup

As the largest and most mature Rollup Layer 2 in the Ethereum ecosystem, Arbitrum has a first-mover advantage over other layers. Its future development is based on the security and decentralization of Ethereum, and it is likely to continue to lead other public chains. and generalized second-tier competitors . The Arbitrum Odyssey activities are in full swing. If you are as interested in Arbitrum as I am, you can refer to this article to deepen your understanding, raise awareness, and strengthen your belief in the long bear market.

Changes in Arbitrum Eco TVL

1. The cliché – Impossible Triangle

I believe that those who participate in Crypto or blockchain have heard of the “impossible triangle”, that is, the blockchain cannot achieve the three characteristics of “decentralization, security, and high performance” at the same time. The design can only choose two of them, while sacrificing one characteristic to some extent.

Ethereum has chosen the security and decentralization features, making it the target of latecomers in terms of performance. Its competitors have used Ethereum to seize part of the ether with the help of capital in the process of improving its performance. The traffic and ecology of the Square has been able to rise rapidly, forming a pattern of multi-chain competition.

Due to the positioning of the smart contract public chain platform, Ethereum has made a big concession in the block time compared to Bitcoin’s 10min block time. In the case of PoW consensus, the block time is about 13S, while the After PoS, the block generation time is fixed at 12S, and the greatest optimization has been made to improve the performance of the block generation time. If the block generation time is too short or the block space is too large, it will be difficult to synchronize in the P2P network. , which poses a threat to network security. Ethereum has thousands of nodes. To achieve synchronization, the client must leave enough time in the P2P network. Otherwise, the network will easily fork due to synchronization delay, which will affect the security of the network. and decentralization.

Most of the other public chains or side chains have high performance and high TPS, abandon the decentralization feature , and only select a very small number of nodes to form a consensus block, so as to make the synchronization time between node clients And the block space has been improved, and then the performance has been improved, attracting many users.

The Impossible Triangle of Blockchain

Speaking of this, many people may think that this is also very good, and you can get a better experience during use, but such a high-performance experience will cost a lot, so I have to talk about Ronin as a sidechain—— A side chain designed solely for Axies infinity chain games. On March 31, 2022, Ronin’s development company, Sky Mavis, announced that 173,600 ETH and $25.5 million in cash in its cross-chain bridge were stolen by hackers. This loss up to $610 million.

The reason for the post-mortem analysis is that the hackers stole the private keys of the Ronin validator node and the Axie DAO validator node to forge withdrawals and stole the assets in the bridge. The Ronin bridge consists of 9 validator nodes. The hacker only obtained the control of 5 validator nodes and stole the assets . It can be seen that the high performance traded at the expense of decentralization and security is very vulnerable in extreme situations. .

PeckShield sorts out asset theft and transfer paths

Having said so much, let’s talk about the original intention of the birth of the blockchain, which will help us to clear the fog and see the truth. In 2008, Satoshi Nakamoto created BTC, I don’t know why he created BTC, but the emergence of BTC has created a fact – a decentralized and sufficiently secure electronic currency officially challenged the central bank’s currency.

Although its growth and experimentation has been a long and tortuous road, we cannot know whether it will be successful, but it is certain that it carries people’s good wishes for decentralization. After Bitcoin, Ethereum is the most decentralized blockchain, and the developers and community of Ethereum chose to put decentralization and security first, which also greatly contributed to the development of Ethereum. Success, because the original intention of people to create and participate in blockchain is that there can be a decentralized system in this world that is secure enough not to be controlled by a single point. Ethereum has been walking on this road, this is the future Metaverse The foundation of coexistence with the real world, the Metaverse can realize the cross-border, cross-regional communication and integration of people, and the foundation of the Metaverse will also need a decentralized and sufficiently secure bottom layer.

Ethereum and the Ethereum ecosystem seem to be the best choice for the future . But does that mean we don’t need to improve Ethereum’s performance? actually not! Ethereum’s scaling solutions, such as plasma and side chains, took a relatively insecure path until the introduction of Rollup and modular blockchains finally showed signs of loosening the Impossible Triangle.

2. Modular blockchain

Modular blockchain refers to the separation of the execution layer, consensus layer, data availability layer, etc. of the blockchain to achieve the scalability and performance improvement of the blockchain . The mainnet chain that Ethereum ran on before the merger was the execution layer, responsible for running virtual machines to implement changes in world state and execution of smart contracts, which is where Dapps run and transactions are processed. After the merger, the beacon chain is used as a consensus layer to replace the existing PoW consensus mechanism and is responsible for the selection of block rights for new Ethereum blocks. Unlike the previous Ethereum mining method, the merged Ethereum no longer needs to be recalculated. Instead, the block is packaged by randomly selecting the verification node, and further preventing evil by separating the block proposer and the packager. So far, the consensus layer and the execution layer are separated.

The current single blockchain, consensus, execution, and D/A are all done by one layer, and the emergence of Rollup design is to transfer execution to off-chain, put transaction execution and state transition off-chain, and upload data by uploading data. To the Ethereum main network to ensure data availability to achieve the separation of the execution layer and the data availability layer.

The monolithic blockchain is developing towards a modular blockchain just like the development of the CPU. This is the best solution for the blockchain to balance the trilemma, and Rollup is a very critical part of breaking the impossible triangle.

3. Rollup expansion

Rollup, as the Layer 2 expansion plan hand-picked by God V, is considered by the community to be the best path for the current Ethereum expansion. At present, there are two mainstream rollup expansion schemes, namely Optimisitc Rollup and ZK-Rollup . Among them, OP-Rollup adopts a fraud proof mechanism to ensure the security of Rollup. The mainstream solutions include Arbitrum and Optimism. ZK-Rollup uses zero-knowledge proof to ensure security. The mainstream general solutions include zksync and Starknet, etc. In addition, there are TEE Rollup solutions such as Obscuro to expand the capacity of Ethereum.

The so-called Rollup is to disperse the calculation pressure of the main network by putting the calculation that originally occurred on the main network and the storage of some data off-chain , and only transmit the calculation results back to the Ethereum main network in the form of calldata for storage, and store it to the Ethereum master. The data of the network is the minimum data to restore the Rollup chain, and the correctness of the data returned to the main network is ensured through fraud proof and zero-knowledge proof, so as to achieve the inheritance of the security of the Ethereum main network by Rollup. Rollup scaling has become the most promising direction for Ethereum scaling, and Arbitrum occupies an important position in it .

Fourth, discuss the architecture design of Arbitrum in detail

1. Ethereum Layer1 mainnet contract

As mentioned earlier, Rollup ensures data availability by uploading data to the Ethereum main network. How does this work? On the Ethereum mainnet, Arbitrum has deployed the following major contracts, inbox contract, outbox contract, ETHBridge and Rollup contract.

●inbox contract : It can be understood as the mailbox opened by Arbitrum on the Ethereum main network, which is specially used to store the calldata data submitted by Sequencer. The verifier or other participants in the ecology can locally restore the complete Sequencer chain according to the data in the inbox contract.

●outbox contract : The outbox contract is mainly used to receive the news that layer2 returns to layer1. For example, after the Arbitrum official bridge withdraws the assets, after a seven-day challenge period, the user needs to go to the official bridge to claim the assets withdrawn from Arbitrum to Achieve the integrity of assets back to the Ethereum mainnet.

●ETHbridge : The ETHBridge contract manages the official bridge of Arbitrum. Users deposit assets into the official bridge contract of Arbitrum, and the assets are locked on the Ethereum mainnet, while the assets are transferred to Arbitrum through retryable notes.

●Rollup contract : The Rollup contract is responsible for implementing fraud proofs on the Ethereum mainnet. After the dispute assertion is determined off-chain, the Rollup contract will verify the transaction in dispute, finally determine the correctness of the transaction, and confiscated the malicious party’s pledged assets.

Arbitrum Architecture

2.Sequencer Chain

Sequencer Chain refers to Sequencer (Sequencer, a full node that packs and sorts layer-2 transactions, equivalent to a block-producing node of a layer-2 network. Unlike other layer1 networks, Sequencer nodes do not need to compete for block production through a consensus algorithm. Instead, it directly has the power to package blocks. At present, Arbitrum’s Sequencer is run by the official, and the block production rights are completely controlled by the official) The transaction in Rollup is packaged into the layer2 block and connected by a chain structure. The data structure is similar to that of the general blockchain. The transaction data of Layer 2 is stored through the Sequencer Chain. The user initiates a transaction and sends the transaction to the RPC node through RPC (remote procedure call), which is then forwarded to the Sequencer node. , Sequencer packages the transaction immediately after receiving the user’s transaction to realize the primary confirmation of the layer2 transaction.

After collecting transactions within a period of time, Sequencer will form a batch of transactions within this period, and after compressing, upload the transaction data in the form of calldata to Arbitrum and deploy it in the Sequencer inbox contract of Ethereum Layer 1 to achieve The data availability is placed on the Ethereum main network, and the execution is migrated to the design of layer 2. At this point, the second step of confirmation of layer 2 is realized. At this point I’ll ask a few questions to explore the details of Sequencer.

Sequencer Chain Arbiter

●Question 1 : Sequencer has packaging rights without consensus algorithm competition, and it is controlled by the official Arbitrum. Does it mean that layer2 is centralized?

● Question 2 : How does Sequencer handle MEV (Miner Extractable Value)?

●Question 3 : Sequencer is the main node that promotes the Sequencer Chain. If it goes down, what will happen to layer2 transactions?

First of all, let’s discuss the first question. Currently, Sequencer is running in the official hands of Arbitrum. This is because the project is in the early stage of development. The project owner masters Sequencer, which helps to ensure the safe upgrade of the project and the advancement of Arbitrum. There may be a certain centralization problem in the control of the chain, but according to the data uploaded to the inbox contract by Sequencer, the user can completely restore the complete transaction of layer2, and can smoothly withdraw the assets of layer2 back to layer1, at the level of asset ownership. It is safe enough because it relies on the security of layer1. And as the project matures, Sequencer will gradually become decentralized, and will be jointly managed and run by the community and the Arbitrum project. At present, Arbitrum and Chainlink have cooperated on the decentralized sequencer, and will also be implemented in the future. Advance the decentralization of Arbitrum Sequencer.

For the second question, you need to understand the composition of MEV. MEV includes transaction fees and sandwich attack arbitrage. Currently, Sequencer is officially run by Arbitrum. For layer2 transactions, transactions are sorted and packaged on a first-come, first-served basis. There is a sandwich attack, which is only charged for the calculation and storage of layer2 transactions and the gas fee required for uploading calldata to the mainnet inbox contract. When Sequencer is decentralised, there will be a relatively large number of participants randomly selected to become Sequencer nodes. At this time, out of game, Sequencer will also extract MEV, but Arbitrum’s route will also be reasonably extracted towards MEV, minimizing MEV. route development.

Question 3: After the Sequencer node goes down, does it mean that the transactions on layer2 cannot be processed? In fact, Arbitrum has taken this problem into consideration at the beginning of its design. When the Sequencer is down, the transaction initiated by the user on Layer2 will send the transaction to the Delayed inbox contract of layer1 through the layer1 RPC call to ensure that the transaction can be processed and stored. .

3.Rollup Chain

As we mentioned earlier, the transaction of layer2 is transferred to the inbox contract of layer1 in the form of calldata after the Sequencer is packaged, so who will verify for us whether the data stored in layer1 is real, and whether the Sequencer cheated when uploading In the case of fake transactions, it is time to talk about the special fraud proof mechanism of Optimistic Rollup. The data that Sequncer transmits to the inbox contract is open and transparent, and can be supervised by participants in the entire network, which is also the basis for fraud proof.

Because the perpetrator never knows how many participants are monitoring the data on the chain. At this time, another chain, the Rollup Chain, is introduced, which can also be called the validator chain. If conditions permit, everyone can run a Sequencer chain locally according to the calldata data in the inbox contract, because the data in the inbox contract is the minimum data to restore the state of layer2, and people can run all transactions locally , to ensure that Sequencer is not doing evil.

But does everyone really need everyone to maintain Arbitrum state? Obviously, it is impossible. Only participants like exchanges with a large amount of assets in Arbitrum will maintain the state of Arbitrum locally to ensure that their assets are safe in Arbitrum. This is why there are many Sequencer Chains, but only the Sequencer chain that Arbitrum runs itself is the main chain that maintains the network.

Rollup Chian is a chain generated by verifiers in the network to pledge the network state. It runs on the Ethereum main network . For example, for a period of time, the verifier will pledge the status uploaded by the Sequencer to the Inbox contract, that is, the verifier Bet on the correct transaction, issue an assertion by staking ETH, claiming that staking this transaction history is correct.

If all transactions are correct, the state of the chain will continue to be updated. However, if someone commits evil and pledges the wrong transaction status, the perpetrator in the network will meet the validator who bet on the correct status. When a conflict occurs, there is a disagreement in the Rollup chain. The justice verifier and the perpetrator find the disputed transaction through a method similar to the dichotomy, and these operations to find the disputed transaction data are performed in layer2. The Rollup contract re-executes the disputed transaction and adjudicates the assertions of both parties. In the end, the perpetrator will be fined and confiscated of the pledged ETH, and a part of it will be rewarded to the justice validator to reward its protection of the network.

In order to prevent evildoers from attacking the network, part of the confiscated ETH will be destroyed to prevent the collusion between justice verifiers and evildoers, and attack the network at zero cost. And that’s the Rollup Chain and Proof of Fraud. The simple description is that many participants in the network are running the complete state of layer2 locally. When malicious transactions are found to attempt to tamper with the state of the chain, many participants will use fraud proofs to advance the state of the chain in the correct direction. The challenge period for fraud proof is 7 days. After 7 days, the transaction status is confirmed and cannot be modified. This is the third-level confirmation of the layer2 transaction. On the premise that the Ethereum main network does not fork, the third-level confirmation is the final confirmation state of the layer2 transaction.

Rollup Chain Arbiter

4.Truth

The network currently running on Arbitrum is Arbitrum One. Offchain labs has written AVM through mimi language. AVM is an EVM-compatible virtual machine on Arbitrum. Dapps running on the Ethereum mainnet can seamlessly migrate their applications to Arbitrum, because Arbitrum EVM compatibility at the bytecode level is achieved, which means that developers can deploy applications on Arbitrum with almost no code adjustments.

Ntiro is an upgrade of Arbitrum One. In the Ntiro upgrade, Arbitrum optimized the gas model, making the development experience of Arbitrum closer to the Ethereum mainnet and more friendly to developers and users. In addition, the Ntiro upgrade will be removed. AVM is replaced by Go-Ethereum compiled with WASM. Go-Ethereum is an Ethereum client written in Go language, and it is also the Ethereum client that is currently used by the Ethereum mainnet. This upgrade will enable fraud proofs to run better on layer 2, and users can also get a better interactive experience, and all these upgrades are transferred smoothly. The most intuitive feeling for users is that Arbitrum has become better to use.

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5.Anytrust

The Anytrust chain is a chain implemented by Arbitrum based on the Ntiro stack. It can be seen that they will be launched together at a similar time, and then run together. Anytrust is run by a node committee. Compared with the side chain, Anytrust needs There are fewer trust assumptions . Traditional sidechains require more than 2/3 of the nodes to be honest to ensure the security of the chain. Anytrust relies on the function of Rollup, and only a very small percentage of nodes are honest to ensure security, even if a lot of If members refuse to cooperate, the chain can still run normally by rolling back to the Rollup state, and when the committee resumes normal operation, it will switch back to Anytrust.

The launch of Anytrust is mainly aimed at the application scenarios of high-frequency trading such as chain games. Even though Ntiro can achieve high expansion, in order to meet the needs of applications such as chain games and balance the development of the ecosystem, Anytrus will provide developers with more choices , to facilitate its construction of projects and ecology.

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Five, the scenery should be long-term

We can’t help but be affected by falling and cold markets, but learning to question allows us to more clearly grasp the essence of things in the midst of chaos. A truly disruptive innovation will not be defeated by market fluctuations, only more disruptive innovations can defeat it. Rollup technology is a disruptive technology that solves the expansion of Ethereum. It is really solving the performance pain points and needs of Ethereum. We maintain confidence in Rollup and Arbitrum. The expansion of Ethereum is long and difficult, but fortunately Yes, there are always great teams moving forward and building products. We should think calmly in such an atmosphere and think about how to participate in the construction and improvement of existing problems, which will make our minds clearer and discover more incredible innovations in the process of exploration!

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Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/odyssey-is-coming-do-you-really-understand-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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