Given the seriously jammed mainnet, or Layer 1, with high gas fees, Layer 2 was put forward by Ethereum developers to enhance the network performance, increasing its TPS.
Arbitrum is Offchain Labs' Layer 2 scaling solution, consisting of two separate networks,namely, Arbitrum One and Arbitrum Nova. They are based on different technologies.
How Arbitrum One works?
Arbitrum One is a L2 protocol which guarantees that the data posted to layer 1 is valid through multiple-round interactive Optimistic Rollup.
- Rollup: One of the layer 2 solutions that perform transaction execution outside the main Ethereum chain (layer 1), but post transaction data on layer 1.
- Optimistic Rollup: One type of Rollups which optimistically believes that the data posted to the Ethereum mainnet is correct, and if anyone observes that the data is wrong (i.e., there is fraud), they can issue a challenge during a period. Therefore Optimistic Rollup is also called fraud proof. In this way, it is guaranteed that the data finally posted to the Ethereum mainnet is valid.
- Multi-round interactive Optimistic Rollup: The validator on layer 2 posts the bundled data to layer 1 and locks a bond in the smart contact. If someone thinks the transaction data is wrong, he has to issue a challenge in a time window and lock a bond in the smart contract too.
The validator and the challenger continuously split the disputed part in a dichotomous way off-chain until the the dispute is narrowed down to a specific part, and then go to layer 1 to resolve it.
By using a multi-round interactive design, Arbitrum One can efficiently resolve disputes on layer 1 at a low cost.
- Extremely low transaction fees
- Trustless protocol
- Funds are as cryptographically secure, as on the Ethereum mainnet
- Users are always in control of their funds
- No requirement for operational activity to keep the funds safe
How Arbitrum Nova Works
AnyTrust-based Arbitrum Nova can make transaction costs down to an ultra-low level through a new security model supported by an external Data Availability Committee (DAC).
- AnyTrust: As a variant of Arbitrum Nitro, AnyTrust is open to a mild trust assumption for lowering costs.
- DAC: Based on AnyTrust, it is assumed that at least two members are honest in the Data Availability Committee (DAC) with a total number of members equaling N. Then, if N-1 members promise the access right to some data, at least one of them is honest to ensure data availability for the normal functioning of a Rollup protocol.
If the committee refuses to sign or a group of members collapses, the network can still be functional by falling back to Rollup. To keep it running, data will be posted on Layer 1 with a withdrawal period like Arbitrum Rollup. After the committee is back on track, the network will be seamlessly switched back to a mode with a faster speed and lower transaction costs.
- DACert: Sequencers batch and compress data and submit it to DAC, requiring a data availability certificate (DACert). Then, sequencers will broadcast the received certificate as a data availability promise on Ethereum.
Compared with other networks, those based on AnyTrust technology can support ultra-low transaction costs for users. This is because the data posted by Arbitrum Nova is a DACert proving availability of the data, instead of full data, saving the biggest cost on Arbitrum.
- Ultra-low transaction costs
- Designed for high-volume DApps
- Funds are as cryptographically secure, as on the Ethereum mainnet
- Users have full control over their assets
- EVM compatibility
Take imToken for example, first download and install imToken (https://token.im/ ) and create/import an identity wallet.
Note: Check the website security certificate before downloading.
Arbitrum One wallet
Open your ETH wallet then click “Ethereum” at the top. Choose “Arbitrum” in the pop-up to switch to the Arbitrum One wallet for transferring, receiving, and trying out the DApp.
In the 2.11.0 version of imToken, you can see all the NFTs you have on the Arbitrum network through the “NFT” portfolio. The basic information and trading history of an NFT will be shown after you click it.
Arbitrum Nova wallet
Open your ETH wallet then click “Ethereum” at the top. Choose “Arbitrum Nova” in the pop-up to switch to the Arbitrum Nova wallet for transferring, receiving, and trying out the DApp.
In order to scale Ethereum to accommodate a growing number of users, developers have proposed 2 solutions, namely, layer 2 and sharding (a layer 1 scaling solution).
Layer 1 refers to the Ethereum blockchain itself, and layer 2 is a network or technology that operates on top of Ethereum to improve its scalability and efficiency.
Mainstream layer 2 solutions include ZK Rollup, Optimistic Rollup, Plasma, State Channels, Validium, etc.
Rollup is a collective term for solutions designed to improve the performance of the Ethereum mainnet by handling transactions off-chain while keeping part of the data of each transaction on-chain.
There are two main types of Rollup solutions: ZK Rollup and Optimistic Rollup.
ZK Rollup is a layer 2 solution that uses zero-knowledge proof, but it is not EVM-compatible and takes a long time to generate zero-knowledge proof. So Optimistic Rollup was proposed in June 2019. In this scheme, zero-knowledge proof is removed, however, a penalty mechanism is added to ensure data security (slightly lower than ZK Rollup) while supporting general smart contracts more easily.
Optimistic Rollup executes smart contracts through OVM (Optimistic Virtual Machine), which is full-featured and EVM-compatible. This means that developers can migrate DApps to layer 2 with just a few lines of code.
Offchain Labs, the development team behind Arbitrum, is a blockchain startup focused on enterprise applications and based in New York City.
Its co-founder Ed Felten is a professor of computer science at Princeton University and former Chief Technologist of the Obama Administration. He founded Offchain Labs with three other co-founders in the fall of 2018.
Arbitrum block explorer
Arbitrum block explorer is an open source web tool that stays synchronous with the Arbitrum network and allows you to view information about blocks, transactions, addresses on Arbitrum.
- Arbitrum One:
- Arbitrum Nova: https://nova-explorer.arbitrum.io/
- Celer Bridge
- Arbitrum One website：https://arbitrum.io/
- Arbitrum Nova website: https://nova.arbitrum.io/
- Offchain Labs website：https://offchainlabs.com/
Risk Warning: The content of this article does not constitute any form of investment advice or recommendation. imToken does not make any guarantees and promises for the third-party services and products mentioned in this article, nor assume any responsibility. Digital asset investment has risks. You should carefully evaluate these investment risks and consult with relevant professionals to make your own decisions.
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