As the wider crypto world sees a resurgence of enthusiasm at the end of the summer, more and more blockchain developers who have taken the plunge are facing the glaring scaling issues faced by decentralized applications on the Ethereum blockchain. The popular network has seen its popularity explode over the past year, but its transaction volume has remained desperately stable as the network continues to operate near its limits, resulting in slower transaction speeds and high on-chain fees. crowded.
Major Ethereum developers have planned major blockchain upgrades to rectify these issues, but even in the early stages of the crypto world, network transition is a long and arduous task. This is why developers are looking for so-called Layer 2 scaling solutions, which rely on the Ethereum network and handle transactions separately in a cheaper and faster way, while recording transactions in the Ethereum blockchain, although in batches.
The Layer 2 landscape is early, but crucial for Ethereum’s continued scalability. As a result, there has been quite a bit of heated discussion among blockchain developers regarding the early players in the space. Offchain Labs has developed a highly publicized stacking network called Arbitrum One, which has built up noticeable support and momentum since its developer beta launch in May, with around 350 teams signing up for access, according to the company.
They have attracted high profile partnerships including Uniswap and Chainlink, which have promised early support for the solution. The company also quickly caught the interest of investors. The startup tells TechCrunch it raised a $ 20 million Series A in April of this year, quickly followed by a $ 100 million Series B led by Lightspeed Venture Partners that closed this month and valued. the company at $ 1.2 billion. Other new investors include Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, Alameda Research, and Mark Cuban.
It has been a long enough journey for Arbitrum technology to be accessible to the public. The technology was first developed at Princeton – you can find a YouTube video where the technology is first discussed in earnest in early 2015. Longtime professor Ed Felton and his co-founders CEOs Steven Goldfeder and CTO Harry Kalodner detailed a deeper underlying vision in a 2018 Research Paper before authorizing Princeton’s technology and expanding the business. Felton previously served as Deputy Director of Technology in the United States at the Obama White House and, alongside Goldfeder, is the author of a leading handbook on cryptocurrencies.
After a long period of secrecy and a few months of limited access, the startup is set to publicly launch the Arbitrum One mainnet, they told TechCrunch.
This team’s scaling solution has few direct competitors – the optimism backed by a16z is its most notable rival – but Arbitrum’s biggest advantage is probably the smooth compatibility it enjoys with decentralized applications. Designed to run on Ethereum, compared to competitors which may require more heavy work on the developer’s part to be fully compatible with their stacking solution. This selling point could be important as Arbitrum seeks legal support on the Ethereum network and crypto exchanges for its product, although most Ethereum developers are well aware of what is at stake at large.
“There is so much more demand than supply on Ethereum,” Goldfeder told TechCrunch. “Rollups give you the security derived from Ethereum but a much better experience in terms of costs.”