Arbitrum Rollup : 3 Components, OffChain Labs, Chainlink

What is Offchain Labs?

The Offchain Labs Inc. is a crypto startup based out of New York. The company is building a platform called Arbitrum. Arbitrum aims to make smart contracts easy, cheap and accessible to the general public while unlocking their complete potential. The functioning of the project runs on Ethereum and operates well with native contracts and tokens of Ethereum. We’ll check their Layer 2 scaling solution, Arbitrum Rollup, in detail in this article.

The project solves a issue in blockchain adoption. Many organizations deem it is unscalable. A lot of them even show concerns about the security features of various blockchain applications. But Arbitrum promises to provide production-level security via its smart contracts.


Who Created Offchain Labs?

The Offchain Labs have three co-founders.

Steven Goldfeder is the CEO and one of the co-founders. He is a Ph.D. from Princeton University, and he has worked a lot to connect and enhance cryptocurrencies and cryptography. He has also co-written one of the most popular books on cryptocurrencies, Bitcoin, and Cryptocurrency Technologies.

Ed Felten is the other co-founder and the Chief Scientist of Offchain Labs. Harry Kaldoner is the third co-founder and the CTO of the organization.


Who Are the Investors in Offchain Labs?

Through one funding round, Offchain Labs have raised a total funding amount of $3.7 Million. The company has a total of 5 investors, one of them leading the total investment.

Offchain Labs raised this amount through a seed round in April 2019. Among the investors, Pantera Capital is the lead investor. Other investors include Coinbase Ventures, BlockNation, Compound, and Jake Seid.


What is Arbitrum Rollup Ethereum Layer 2 Solution?

It is a layer two platform responsible for making smart contracts private, fast and scalable. The interoperation of Arbitrum happens closely with Ethereum. It provides for a similar developer interface, so the developers on Ethereum can compile and run their contracts on Arbitrum. Arbitrum can achieve this through its unique network design, virtual machine architecture, and incentives.

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How Arbitrum Rollup Works?

The Arbitrum Rollup has three components – ArbOS, Validators, and Ethbridge.

The compiler on Arbitrum Rollup compiles and links the contracts written in Solidity to a single file that can be executed on the Arbitrum Rollup chain. On the other hand, the Ethbridge provides the connection between the Arbitrum Rollup and Ethereum platforms. Anyone in the Ethereum platform can call the Ethbridge to interact with functionalities on the Arbitrum platform.

Validators are working machines behind the Arbitrum Rollup platform. They help in tracking the Arbitrum Rollup chain for its state and advance the chain whenever necessary.

ArbOS is the operating system that differentiates between contracts that are untrusted and limits their resource usage. The operating system also managed the economy of the model, that is, they collect fees from the users that will run the validators.

Let’s consider a typical case. When a contract runs in the Arbitrum Rollup, it does so in the virtual machine installed inside it. The ArbOS picks up messages from the inbox of each Arbitrum chain and dispatches them to the matching contract. Then, it publishes the results.

Whenever the virtual machine makes progress, even the smart contracts make progress. The advancement of the virtual machine chain is done via disputable assertion, which is submitted to the Ethereum platform through the Ethbridge.


Review of the Arbitrum Rollup

The Rollup creates a new realm for the scalability of smart contracts. It not only makes the dapp scalable, but also makes it cost independent of size and data.

It also increases the trust in the code through the AnyTrust Guarantee through which anyone can be a validator. Only one honest validator is required to ensure the proper behavior of the Arbitrum Rollup chain. Of course, the major plus is the compatibility of Arbitrum Rollup with the Ethereum platform.

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Pros and Cons of Arbitrum Rollup

Like any other crypto solution, even Arbitrum has its share of advantages and disadvantages.

The advantages of the Arbitrum Rollup are that it supports highly complex transactions. It eliminates the need for the execution of full transactions on the Arbitrum chain. The platform also does not require large on-chain transactions.

It makes the process simple by splitting the total cost of proof into smaller blocks and each proof of transaction is a small, consumable size. Other than this, there is also no requirement for intermediate state merklization.

The disadvantages of the Arbitrum Rollup are that it is highly complex, especially for beginners in the crypto space. Overall, the industry is in the nascent stages, so there will always be that element of risk and uncertainty.


What Features Make Arbitrum Rollup Unique?

The basic concept of Arbitrum is what makes it unique. These blockchains are completely compatible with Ethereum and they can interact with Ethereum tools.

It gives the ability for any user to deposit their Eth tokens to the Arbitrum chain, and they can withdraw these tokens back to the Ethereum chain. Also, it gives the ability for any user to commence an Arbitrum chain.

Arbitrum Rollup also contributes a lot to make your dapp cheaper and easily scalable. It provides more functionality compared to deploying your dapp directly on the Ethereum platform.

Another unique feature of Arbitrum is that anyone can act as the validator. It happens using open-source validator software. The security model of Arbitrum is similar to Ethereum, that is, it is trustless.


How to Use Arbitrum Rollup?

If you are interested in developing via Arbitrum, the organization provides a good place to start. You can begin with the Official Labs Dev Center on the Offchain Labs on the website. This section has a detailed introduction to the internal workings of Arbitrum.

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You can develop via Arbitrum without the need for any setup installation. You can achieve this using the organization’s public testnet which runs on the top of kovan.

But of course, there is an option to develop Arbitrum locally as well. You have to first install Arbitrum including the dependencies. Then, deploy the Arbitrum on the L1 blockchain.

You can check the quickstart here that guides step-by-step to install and work with Arbitrum locally.

Quickstart link –


Does Arbitrum Rollup Require KYC?

According to the information provided by the founding team, the use of Arbitrum does not require KYC. There is no mention of it anywhere on their developer’s portal or blogs.


Arbitrum Chainlink Partnership

The Offchain Labs Chainlink partnership will make possible the unique form of computation of the smart contract. It improves the security and safety use of the smart contract that uses Chainlink.

The chainlink node operators will not be able to act as validators. It enables the developers to build smart contracts uniquely, providing new levels of scalability. This partnership also promises improvements in cost efficiency for the developers.


Takeaways – Arbitrum Rollup Crypto Review

The Arbitrum Crypto is a leap for the crypto-world. The way smart contracts will be designed and deployed will be changed in the coming future. With the funding, expect Offchain labs to escalate this product quite quickly in the coming days. You can check out their website here –

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