The Rise of Ethereum Rollups: Scaling through Arbitrum

Transcript

[Music] foreign [Music] hey there my name is Harry kloidner I'm one of the co-founders of off chain labs and uh off chain Labs being the original creators of arbitrum and here excited to be here today to talk a little bit about arbitrum a little about like history how it works and then kind of what's uh what's next and what the exciting things we're working on are so uh very excited to be here so just kind of very high level to start

off hopefully most of you are kind of already familiar with arbitrim but for anybody who's not we are an optimistic roll up a layer two solution for scaling ethereum where we have essentially a set what feels like a separate blockchain with its own capacity but tightly connected with ethereum easily securely transferring funds look providing low-cost transactions in a trust in a way that's secured by ethereum with full evm equivalency and so kind of anybody used to using ethereum or using any evm chain you can go on arbitrum you can take advantage of our ecosystem of the like amazing ux that kind of the chain has for anybody who's used it and generally it's a great place to be um and so just a few numbers there uh for for people interested

um arbitrim right now has a very large percentage of the overall share of kind of users using Roll-Ups for kind of real world usage today um over five billion dollars in value in the system around over I think around yeah I think this is still accurate around 65 of kind of the total usage of Roll-Ups is in arbitrum um and over a thousand dapps and huge number of unique addresses so kind of if you're looking for a chain with like a very large ecosystem and with kind of very tight ethereum alignment arbitrum is the place to be um and just to kind of go into a little history just because this is really interesting and I think uh generally surprises people kind of how how long this has been going on for the original idea behind Arboretum started back in in 2014

um by one of my co-founders before ethereum had actually even launched seeing the problems that kind of if ethereum ever reached real Mass adoption that the bandwidth available wouldn't be enough for for kind of anywhere near what would be needed and already at that point kind of thinking about what would what would be necessary now the project then kind of petered out a little bit it was very early ethereum had barely launched back in 2018 we kind of start started back in Earnest and kind of progressively built up and built up until August 2021 when the actual chain launched um and arbitrum one opened up as an optimistic roll up that anybody could Deploy on anybody could use um and then since then we've kept iterating and so again one year later we

actually threw out the entire Tech stack we launched arbitrum Nitro which was a huge iteration on the technology and basically replacing large percentages of what we were built and providing even kind of faster speeds cheaper transactions and kind of continuing to constantly iterate which is something we really believe in nothing that anybody's building today is going to be the best in class in five years all of us have to keep innovating in order to really keep up with the ecosystem and then on here we also have kind of the other really big milestone that was very exciting kind of that happened earlier this year which is that the Arboretum Dow launched an arbitrum one and Arboretum Nova became decentralized chain that are community-owned which was a huge milestone and from there the growth will only continue and so I just

marked on here a couple big upcoming things that we're very excited about one being permissionless validation that will lead to kind of the essential essentially the pretty full decentralization of Arboretum in a very real way and kind of the goal being to continue the iterative decentralizations that Roll-Ups have been experiencing over the last couple years and to really reach that kind of targeted essentially end State um and kind of fulfill the promise of what ethereum is building towards and the other in a very different area that we're extremely excited about that I'll talk a little bit more about later is Arboretum stylus which is going to massively extend the capabilities of arbitrim Technology by also enabling smart contracts using webassembly so programming and C or rust or C plus plus

which is going to massively open up what's possible in the blockchain space um so I'm going to just kind of start in and talk a little bit about like high level what is arbitrim other than kind of a chain that you can connect to on your RPC um and the best way to describe that is to talk about how sequencing works on arbitrum because that is kind of the life cycle of what what's actually happening when you submit your transaction and so there's an entity called the sequencer that all transactions get sent towards the sequencer will then order those transactions and so that essentially defines kind of what the outcome of the chain is because what a chain is is a bunch of transactions that are executed in the order each one updates the state and so then you have your blockchain but how does it actually get secure because

what I could just describe could be a server on AWS and what we want is a real decentralized secure system and so what the sequencer does with those transactions well two things happen then on the right hand side of this you can see those transactions go through the state transition function we build blocks those blocks have effects it could be swaps it could be deposits or withdrawals any number of things those create L2 blocks much like what a regular blockchain would look like the other part is what's unique to Roll-Ups where we see this part which is batch and compress um and what that's what's happening there is this really great thing that roll up to do which is actually posting those transactions to ethereum which is the way which is the main method by which that along with kind of with a part of the protocol mention later

inherit the security for from ethereum which is paid for by every user when they use arbitrum so that's kind of the high level of what happens to your transaction um and the other cool part about sort of how the technology works is this is not a completely separate Tech stack from ethereum this is not like some other random system this is building on top of goatherium which is the core and most used ethereum execution layer client and so what that looks like is that arbitrum starts with its core and just Builds on top of it and it extends it slightly it modifies it in various ways but it lets you take advantage of all of the tooling and all of the ecosystem that's built around ethereum in a very fundamental way the way you become

ethereum equivalent is by actually having the same engine that drives ethereum be it the core of your equivalent system and so the next part that's really interesting here and this is kind of the big and one of the big Innovations with Nitro that we launched a year ago is separating execution from proving and so we essentially have two different paths that the same code takes on one side we have the core State transition that we compile into webassembly um and actually are able to prove on chain but that wouldn't be very efficient if all the system was was running this this locally because it wouldn't be native speed quite the same way as you would hope with ethereum so then you would have less capacity on your roll up than you have on ethereum

which would not be good for anybody and so the trick here is that instead we also compile that same code to native to native code for your machine and if we had two different executables if we had two different systems that were supposed to ident be identical there would be a huge amount of risk here because we'd have two implementations we'd have to make them be perfectly in sync it wouldn't work but instead you can take the team code and just compile it in two different ways and you can have this high level of confidence and then the last part which I'm not going to go into because we're pretty short on time is the actual optimistic roll-up mechanism and this is the mechanism by which the chain is at any validator can actually challenge the correctness of an assertion you're never when you use arbitrim trusting the

sequencer or once a transaction's been posted to the chain once the patch has been posted the result is and you may have heard of the seven day window and there is a seven day window for challenges but everybody locally knows after a batch has been posted what the outcome is and it's guaranteed to happen the only thing that the window is for is to actually prove to ethereum that that actually is the correct State everybody else is a lot faster than ethereum and this is kind of the core point of an optimistic roll-up protocol is that we're going to do stuff off chain and because ethereum isn't powerful enough to process all of the transactions on arbitrum along with all everything it's already doing and so we have this lighter weight and longer protocol to actually convince ethereum that our

state is correct um and then I'll just mention arbits from any trust which is a solution that's kind of built on top of and I just kind of display it here as a small addition to the diagram I showed earlier which moves the data off chain since everything I described before is a roll up where the data is actually posted to ethereum um whereas arbitrum any trust is what we call our solution that uses an external data availability source and so what that means is you take the most expensive part of running a roll-up which is actually paying for ethereum security for the data posting to ethereum and you instead have a separate committee that's responsible for that and the cool thing here is it's not like a regular saw it's not like a side chain where you need to still let's say assume that two-thirds of some group are honest

in order for your chain to be secure because here you only need one or two out of the entire committee to be honest in order for the function for the solution to function and so this is a really cool sort of intermediate point where you can't where roll ups are still too expensive for D5 30 transactions are amazing but for gaming 30 Cent transactions might be insanely expensive and so kind of exploring Solutions on the spectrum of decentralization with the trade-offs involved is really powerful um for for kind of finding product Market fit for for different solutions um so now I'm going to take a little time to basically give some give some quick highlights for for what's coming next I've talked a lot about kind of where we are today um but we're busy so we're by no means

uh sitting still at uh at where we are um so I'll talk about kind of three quick areas that uh that I think are of a lot of interest right now um the first being sequencing in Mev from the beginning Arboretum had a solution that we called first come first serve which is sort of about transaction ordering um and it's a system that works well but has a lot of issues in terms of for instance if people are familiar with back running um and latency races and it creates a lot of sort of opportunities where the competition to capture Arbitrage value isn't exactly fair and so one of the things that we're working on here is and it's the second one on here that we call time boost is for selling off that ordering and actually having a much fair more fair market decentralized sequencing very much in here as well

um being that right now there are various kind of especially short-term trust assumptions before the sequencer has posted a batch right now if you want to all your transactions secure you're just trusting the sequencer whereas decentralizing this mechanism more can provide higher security levels faster on the Chain before batches have been posted and finally shared sequencing where in this world where we're exploring kind of more and more and more chains there's this really interesting question of what sorts of infrastructure can be shared between multiple different chains and what advantages different chains can get from having that shared infrastructure and so these are these are all kind of really interesting areas next up we have what I mentioned at the beginning arbitrim stylus which we'll be talking a lot more about soon which

we've already kind of talked about some um and this is the ability to actually run smart contracts using wasm which we're incredibly excited about it's an extension we call it evm plus because it's not it's not replacing the evm what it's doing is it's providing a completely second VM that can enable all sorts of use cases that just aren't possible on ethereum today because the evm is is is great in a lot of ways but it's also very limited um and and we think that sort of extending it and providing new capabilities is a really powerful paradigm and then the last one I'll mention is arbitrum orbit which is our system for launching layer three blockchains using arbitrap and technology and this is really kind of an interesting area just

because it takes the sort of already well-known well-studied secure technology that you have for arbitrim today for arbitrum one and Arboretum Nova and you extend that to actually support anybody to launch their own chain as a layer three um and and that's kind of from there it's really sort of a situation where the sky is the limit and I'm really excited to see what people do since the code is extremely modular extremely pluggable there's a huge amount that you can do by taking this existing code and modifying it in different ways for one fun example being adopting new eips that aren't that aren't supported on ethereum yet and wouldn't be supported in something evm equivalent but you may not care about evm equivalents you may instead care about having for example

native account abstraction um gas price reliability not fighting for Block space with other protocols um and then cheaper bridging if you're bridging kind of from if you're bridging into arbitrum one that's a lot cheaper than bridging from ethereum and so having that interoperability between l2s and l3s is a lot more flexible and to leave room for a few questions I think I will wrap it up there and thank you very much for listening [Applause] yeah hi there it was a really good talk and I enjoyed it quite a bit uh I think like the era of public blockchains we are living in now is like the L2 Wars so

kind of as someone who's building a Dap it's a really hellish period to be in because what happens if the l2vr on just like goes belly up or gets like rock doesn't stops existing so kind of that was one question of like how do we do that and the second is the super chain whether there's an equivalent of what a Carl flosh talked about the super chain whether there's an equivalent going on at your site yeah yes I mean to the first question I mean and this is like I'm obviously very biased here so I can't really be impartial but I would say that like looking at you know the two the two factors to really look at when looking at choosing a chain one is ecosystem so who else is there what kind of value is there what kind of users are there and

the other is decentralization and security um and I think arbitrim plays really well on both of those um I would highly recommend L2 beat um as a resource for anybody interested in the security of these systems which does a great job um given that kind of the complexities involved in actually understanding this are are pretty deep and it requires a lot of kind of deep investigation and a lot of times protocols aren't exactly excited to talk about kind of the security risks involved and l2b does is impartial and does a really good job there um in terms of kind of like the super chain or hyper chain there's a lot of I think like a lot of the different uh l2s I think hyper chain is EK sync if I remember correctly um super chain optimism um it's definitely an area we're

interested in um I think that to to me kind of this this is a it's very early um and I think that it's kind of for my comfort it's a little too early to kind of commit to like one model for these new systems and and kind of we've always had a very research different approach um so I think it it will come but and I'm dubious that kind of people who are sort of saying this is the end State this is the dream goal today or necessarily gonna still feel the same way in in a year or two um and and I want to make sure that we take the time and it shouldn't be a year or two to be clear but I want to make sure we take the time to get it right [Applause]

[Music] thank you [Music]