Arbitrum is a second layer (L2) solution for the Ethereum network developed by the American company Offchain Labs. The project aims to increase the speed and scalability of the underlying blockchain.
Arbitrum uses the concept of Optimistic Rollups, allowing developers to easily run smart contracts and Ethereum decentralized applications with lower transfer fees and increased throughput without any changes. In the first half of 2022, Arbitrum became the leading L2 solution for Ethereum in terms of transactions, applications, and TVL.
Arbitrum is deployed on the first (L1) and second (L2) levels. The EthBridge component, which is a set of smart contracts, operates on the Ethereum network and contains folders for incoming and outgoing transactions.
The transfer of transactions from L1 to L2 and vice versa is handled by its own virtual machine (Arbitrum Virtual Machine, AVM), which is fully compatible with the Ethereum Virtual Machine (EVM). AVM supports all EVM programming languages such as Vyper, Solidity, Flint, YUL+, LLLL, which greatly simplifies application development.
In the L2 network, the ArbOS operating system is responsible for executing smart contracts and processing transactions. It transmits transactions through the AVM to the outgoing transaction folder of the Rollup protocol for their further addition to the block, its confirmation and inclusion in the main Ethereum chain.
New blocks are approved by validators who receive transaction fees for this. The architecture of Arbitrum is designed so that one honest validator can approve a block, no matter how many malicious validators exist.
Among the validator nodes, the roles are distributed as follows:
- Active validator - stakes (places his ETH in a deposit smart contract) and offers new blocks to be added to the main Ethereum chain. If the proposed block is incorrect, the validator will forfeit the stake;
- Defensive validator - monitors the operation of the convolution protocol and intervenes if incorrect blocks are found, offering its own block or placing a bet on the block of another validator;
- Watchdog validator - only monitors the operation of the Rollup protocol without making a bet.
Due to the fact that the protective and watchdog validators have 8 days to challenge the block, the same period takes the withdrawal of assets through the native bridge from Arbitrum to Ethereum.