Alt Asset Allocation Ep 92: Scaling Ethereum with Offchain Lab's Co-Founder Steven Goldfeder
Primer: Arbitrum was a class project at Princeton. Today, it is one among many successful layer 2 solutions that scale Ethereum. In this episode of Alt Asset Allocation, host Ben Lakoff speaks with Steven Goldfeder, the Co-Founder of Offchain Labs, the company behind Arbitrum.
Background
Got into crypto in 2013 while doing his PhD in cryptography and computer science at Princeton
Was fascinated by the intersection of cryptography and blockchain technology
Did a bunch of work on MPC wallets and threshold signatures at Princeton
Arbitrum dates back to 2013. His Co-Founder, Ed Felten, was a professor at Princeton at that time
Arbitrum was a class project at Princeton
They built a research paper out of the project. In 2018, they published the paper and founded the company
Where Is The Crypto World Heading To?
Is not able to guess what’s going to happen in the next 1 year
At Arbitrum, their job is to make the user experience and onboarding better
The Future Of Scaling Ethereum
Scaling is one of the most important properties of a blockchain
If you don’t have the supply to fill the demand, fees get expensive
There are trade-offs that you have to make
The blockchain trilemma — you can’t secure all 3 aspects of centralization, security, and scalability
Ethereum made the choice to give up scalability and go as strong as possible on security and decentralization
Other layer 1s scale by limiting decentralization
Decentralization means that people can run nodes and verify the correctness of Ethereum
If you put scalability on the base layer, it increases the requirements to run a node
Layer 2 platforms are blockchains that sit on top of other blockchains
Scalability comes from layer 2
Mental Model Of Ethereum As A Highway
💡 There’s this model of Ethereum as a highway that gets a lot of traffic. Layer 2s are additional highways that plug back into the main highway.
It’s a pretty helpful analogy
Are Layer 2s Competitors Or Collaborators?
It’s a little bit of both
The Ethereum community is extremely collaborative
The different solutions experiment in different parts of the design space
Arbitrum has 2 chains:
Arbitrum One — Has slightly higher fees, full rollup security, and is optimized for DeFi and some NFT projects
Arbitrum Nova — Has lower fees
It’s not a winner-takes-all market
Are There Layer 2 Maxis In The Ecosystem?
Lots of excited people out there
People take a strong opinion for different reasons:
They have a lot of money locked on the platform
Hundreds of apps on a platform
There are L2 maxis out there
Personally, he’s a scaling Ethereum security maxi
Optimistic VS ZK Rollups
Differs in how they prove their results back to Ethereum:
ZK rollups offer validity proofs
Optimistic rollups want Ethereum to optimistically just accept the results without proof. But if anyone challenges it, there is a fraud-proof
Validity proofs are easier to understand. Everything closes immediately and there is no waiting period
The problem is that there are no general-purpose ZK rollups that exist today. Proofs are expensive to craft for general-purpose languages like EVM
Proofs run in a different computational model called circuits
There are ZK rollups that exist in production, but they are not for general purposes. These are usually used for payment
Thoughts On Ethereum And Other Layer 1s
There are many design spaces that people can explore
Ethereum has proven that it can innovate and has a strong community backing it
There will be other blockchains that have specific communities/verticals
If he’s not in Ethereum/Arbitrum, the Cosmos ecosystem would be interesting to him
Arbitrum Odyssey
What Is Arbitrum Odyssey?
A community-driven education and exploration campaign
The goal is to get users to explore, learn, and encounter new projects
Teamed up with Ratwell, a well-known NFT artist
The community voted on which projects they want to feature
Each week, 2 projects will be featured, over a period of 7 weeks
What Would He Have Done Differently?
The campaign was so successful till they had to pause it due to a limited capacity
The campaign resumed after Arbitrum Nitro was launched
The Arbitrum Chains
Uses 2 different technologies:
Arbitrum Rollups — get their security from Ethereum
Arbitrum AnyTrust — like a rollup except that it does not put all the data on Ethereum but uses a data availability committee (Reddit, ConsenSys, P2P, QuickNode, Google Cloud, and themselves)
Arbitrum One is their rollup chain, where DeFi projects and some NFT projects are on
Arbitrum Nova is their AnyTrust chain, which targets gaming and socials
Arbitrum Nova was launched in August. One of their launch partners is Reddit
Both Arbitrum One and Arbitrum Nova are running on the Nitro stack
Before that, they had a different stack called Arbitrum Classic
Do They Expect Additional Arbitrum Chains In The Future?
Have no plans right now to launch further public chains
Have initiatives to increase their capacity over time
Roadmap
Have technical initiatives that are going to be released in the next few months:
Decentralizing the sequencer of Arbitrum
Onboarding new developers while remaining EVM compatible
In the long term, they want to push the boundary forward and advance our understanding of what’s possible
Advice For Listeners
He often gets questions about learning Solidity. If people want to learn Solidity, they should
If you do not know how to code, there’s still a lot that you can do to contribute to the space
Listeners can find out more about him and Arbitrum by following Arbitrum on Twitter and joining their Discord
All information presented above is for educational purposes only and should not be taken as investment advice. Summaries are prepared by The Reading Ape. While reasonable efforts are made to provide accurate content, any errors in interpreting and summarizing the source material are ours alone. We disclaim any liability associated with the use of our content.