As the demand for Ethereum's blockchain continues to surge, the network has been experiencing significant congestion and high gas fees on its mainnet, or Layer 1. To address these challenges and improve the network's performance, Ethereum developers introduced Layer 2 scaling solutions, which operate on top of the mainnet. One of the prominent solutions is Arbitrum, developed by Offchain Labs.
Arbitrum offers two distinct networks: Arbitrum One and Arbitrum Nova, each leveraging different technologies to enhance Ethereum's scalability.
Arbitrum One is a Layer 2 protocol that ensures the validity of data posted to Layer 1 through a process known as Optimistic Rollup. Rollup solutions execute transactions off-chain while retaining some transaction data on-chain to improve performance. Optimistic Rollup takes an optimistic approach, assuming that the data posted to the Ethereum mainnet is correct, also known as fraud-proof.
In the case of a potential dispute, any observer can challenge the validity of the data during a specified window. The challenger and the validator then iteratively narrow down the disputed part off-chain until they pinpoint the exact issue. This process guarantees that only valid data is finally posted to Layer 1, ensuring trustless and secure execution of transactions.
Extremely low transaction fees
By executing transactions off-chain and resolving disputes efficiently, Arbitrum One achieves significantly lower transaction costs compared to the Ethereum mainnet.
The optimistic approach of Arbitrum One ensures that data is fraud-proof and valid, maintaining the trustless nature of the Ethereum ecosystem.
Arbitrum One supports the Ethereum Virtual Machine (EVM), allowing seamless migration of decentralized applications (DApps) to Layer 2.
Enhanced Fund Security
Users retain full control of their funds, and the cryptographic security remains on par with the Ethereum mainnet.
Arbitrum Nova takes a different approach to achieve ultra-low transaction costs while maintaining high-volume DApp support. It employs a security model based on AnyTrust, which involves a mild trust assumption to reduce costs. Additionally, an external Data Availability Committee (DAC) supports this model to ensure data availability and protocol functioning.
The AnyTrust assumption relies on at least two honest members within the DAC to guarantee data availability. If N-1 members provide access rights to specific data, at least one of them must be honest to maintain the functionality of the Rollup protocol. In case of any failure or refusal by the committee, the network falls back to Rollup with data posted on Layer 1 during a withdrawal period. Once the committee resumes normal operations, the network seamlessly switches back to its faster and lower-cost mod.
Ultra-low transaction costs
Arbitrum Nova leverages the AnyTrust technology, allowing the posting of data availability certificates (DACerts) instead of full data, leading to lower transaction costs.
Designed for high-volume DApps
With its cost-efficient approach, Arbitrum Nova can support high-volume decentralized applications without compromising performance.
Arbitrum Nova retains compatibility with the Ethereum Virtual Machine, enabling smooth migration of DApps to the Layer 2 solution.
User asset control
Users retain full control over their assets, ensuring security akin to the Ethereum mainnet.
As Ethereum continues to evolve, Layer 2 solutions like Arbitrum will play a crucial role in enhancing scalability, reducing fees, and improving user experiences across the decentralized ecosystem.
Both Arbitrum One and Arbitrum Nova present promising solutions to alleviate congestion and gas fees on Ethereum's mainnet, contributing to the growth and sustainability of the blockchain space.