As the broader crypto world enjoys a late summer surge in enthusiasm, more and more blockchain developers who have taken the plunge are bumping into the blaring scaling issues faced by decentralized apps on the Ethereum blockchain. The network has seen its popularity explode in the past year, but its transaction volume has stayed frustratingly stable as the network continues to operate near its limits, leading to slower transaction speeds and hefty fees on the crowded chain.
Ethereum’s core developers have been planning significant upgrades to the blockchain to rectify these issues, but even in the crypto world’s early stages, transitioning the network is a daunting, lengthy task.
That’s why developers are looking to so-called Layer 2 rollup scaling solutions, which sit on top of the Ethereum network and handle transactions separately in a cheaper, faster way, while still recording the transactions to the Ethereum blockchain, albeit in batches.
The Layer 2 landscape is early, but crucial to the continued scalability of Ethereum. As a result, there’s been quite a bit of passionate chatter among blockchain developers regarding the early players in the space.Offchain Labs has been developing one particularly hyped rollup network called Arbitrum One, which has built up notable support and momentum since it beta-launched to developers in May, with about 350 teams signing up for access, the company says.
They’ve attracted some high-profile partnerships, including Uniswap and Chainlink, which have promised early support for the solution.
Offchain Labs, a NYC-based provider of scaling solutions for Ethereum, raised $120M in Series B funding.
The round was led by Lightspeed Venture Partners with participation from Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, Alameda Research, Mark Cuban and others. Ravi Mhatre from Lightspeed has joined Offchain Labs’ board with this round.
The company will use the new funding to scale the team, further develop the Arbitrum One ecosystem, build out new scaling solutions in its pipeline and invest in R&D.
Co-founded by Ed Felten, Steven Goldfeder and Harry Kalodner, Offchain Labs also announced that its Arbitrum One mainnet has opened to the public. Arbitrum is a Layer 2 solution for the Ethereum network that is developer-friendly and has a broad ecosystem of support.
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NEW YORK, Aug. 31, 2021 /PRNewswire/ — Offchain Labs, the leading provider of scaling solutions for Ethereum, announced that its Arbitrum One mainnet will open to the public today. The company also announced it has raised $120M in funding, with its latest Series B funding round led by Lightspeed Venture Partners. Other newly announced investors in the round include Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, Alameda Research, Mark Cuban and others.
Ravi Mhatre from Lightspeed has joined the company’s board with this round.
Arbitrum is a Layer 2 solution for the Ethereum network that is developer-friendly and has a broad ecosystem of support. Since Arbitrum One’s beta launch for developers in May, the platform, which allows Ethereum users to transact with very low fees, has had over 350 projects sign up for access.
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Other investors include Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, Alameda Research, and Mark Cuban.
The Series B was an equity round and brings Offchain Labs’ total funding to date to $124 million across three rounds of funding — seed, Series A, and Series B — said Goldfeder. The round also makes Offchain Labs a new unicorn in the crypto space with a $1.2 billion valuation.
Differences with Optimism
Another Ethereum scaling startup, Optimism, also uses optimistic rollups, but the key difference between their approach lies in their respective fraud-proof logic, as The Block Research’s Afif Bandak wrote recently.
Put simply, when projects use optimistic rollups technology for their Layer 2 networks, they have to check whether transactions are valid and then post transaction data on Ethereum.
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While almost all projects deploying on Arbitrum will be launched on Arbitrum One, Reddit recently announced that Arbitrum won The Great Reddit Scaling Bake-off and has chosen to launch their own Layer-2 rollup using Arbitrum technology
Founding Team Offchain Labs was co-founded by Ed Felten, former deputy U.S. chief technology officer in the Obama White House and longtime Professor at Princeton University. Ed started working on Arbitrum while at Princeton University where he met his co-founders, Steven Goldfeder and Harry Kalodner. The three detailed the Arbitrum technology in a research paper while at Princeton that was published in 2018 once Ed returned from the White House.
Offchain was officially born while the three were at Princeton with a mission to scale Ethereum and bring it to the masses.
Enormous transaction times and fees have continued to burden developers despite the fact that markets surrounding the ecosystem have surged over the past year.
As a matter of fact, the core developers of the Ethereum ecosystem have attempted to solve these problems with upgrades to the protocol itself, in the short term, however, there seems to be no easy way out. Hence, it is only natural that the second layer solutions are being explored.
Needless to say, Arbitrum has emerged as a promising solution with the capability to handle more transactions than Ethereum at lower costs. It processes transactions on a sidechain that leverages optimistic rollups tech and then regularly conducts them to the main Ethereum blockchain in batches.
Arbitrum’s Mainnet beta
Until now, only developers could release and test their applications on Arbitrum’s platform.
“We’ve committed to a fair launch, and today we’re delivering on that commitment by opening up to users for all projects simultaneously. But even though we’re removing the whitelist today, this doesn’t mean that every project will choose to go live immediately.
The Arbitrum One Portal is the best place to track the progress of current and upcoming launches on Arbitrum.”
Arbitrum happens to be the first scaling solution by Offchain Labs, and the initiative is working on other solutions to scale Ethereum. Even as the release is a notable milestone, Arbitrum One is still in beta.
Offchain Labs, the developer of Ethereum scaling solution Arbitrum, which uses optimistic rollups technology, has launched its mainnet. The project has also raised $120 million in a Series B funding round.
The mainnet launch means the public can now interact with decentralized apps on Arbitrum, Offchain Labs co-founder Steven Goldfeder told The Block. Until now, only developers could launch and test their apps on Arbitrum, but now their users can use them, said Goldfeder.
Arbitrum is a Layer 2 scaling solution that promises to handle many more transactions than Ethereum at lower costs.
CEO Steven Goldfeder and CTO Harry Kalodner detailed a deeper underlying vision in a 2018 research paper before licensing the tech from Princeton and building out the company. Felten previously served as the deputy U.S. chief technology officer in the Obama White House, and — alongside Goldfeder — authored a top textbook on cryptocurrencies.
After a lengthy period under wraps and a few months of limited access, the startup is ready to publicly launch the Arbitrum One mainnet, they tell TechCrunch.
This team’s scaling solution has few direct competitors — a16z-backed Optimism is its most notable rival — but Arbitrum’s biggest advantage is likely the smooth compatibility it boasts with decentralized applications designed to run on Ethereum, compared with competitors that may require more heavy-lifting on the developer’s part to be fully compatible with their rollup solution.
Offchain Labs, the developer of Ethereum scaling solution Arbitrum, has announced raising $120 million in a Series B funding round. It was led by Lightspeed Venture Partners and also saw the participation of Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, among others.
Of late, the rollup network called Arbitrum One has garnered significant traction and has managed to build up notable support since it beta-launched to developers in May this year. Since then, approximately 400 teams have reportedly signed up for access.
Ethereum’s perennial inefficiencies and the rise of other scaling solutions
Besides, Ethereum’s scalability problems and network congestion have been topics of extensive debate and discussion.