Offchain Labs, the creators of the Ethereum scaling solution Arbitrum, which employs optimistic rollups technology, has launched their mainnet. A Series B funding round of $120 million was also raised for the project.
The launch of the mainnet means that the general public can now interact with decentralized apps on Arbitrum, according to Offchain Labs co-founder Steven Goldfeder. Previously, only developers could launch and test their apps on Arbitrum, but now their users can do so, according to Goldfeder.
Arbitrum is a Layer 2 scaling solution that promises to handle many more transactions at lower costs than Ethereum. It processes transactions on a sidechain that employs optimistic rollups technology, then settles them in batches on the main Ethereum blockchain on a regular basis.
Arbitrum is Offchain Labs’ first scaling solution, and the project is working on additional scaling solutions for Ethereum, according to Goldfeder. “We plan to use the newly raised capital to expand our team and continue to invest heavily in R&D,” Goldfeder said.
Offchain Labs employs 14 people at the moment. According to Goldfeder, the project is hiring in all areas, but the majority of its upcoming hires will be in engineering.
Lightspeed Venture Partners led Offchain Labs’ Series B round. As part of the agreement, Lightspeed’s Ravi Mhatre has joined the project’s board of directors. Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, Alameda Research, and Mark Cuban are among the other investors.
According to Goldfeder, the Series B round was an equity round, bringing Offchain Labs’ total funding to date to $124 million across three rounds of funding — seed, Series A, and Series B. With a $1.2 billion valuation, the round also elevates Offchain Labs to the status of a crypto unicorn.
Distinctions from Optimism
Optimism, another Ethereum scaling startup, uses optimistic rollups as well, but the key difference between their approaches is in their respective fraud-proof logic, as The Block Research’s Afif Bandak recently wrote.
Simply put, when projects use optimistic rollups technology for their Layer 2 networks, they must validate transactions before posting transaction data to Ethereum. However, if they accept an invalid transaction, whether intentionally or unintentionally, anyone on Ethereum can challenge them.
This is where the approaches of Arbitrum and Optimism diverge. According to Bandak, Optimism limits smart contract sizes to what can be re-executed on Ethereum, whereas Arbitrum allows users to dissect smart contracts into pieces and prove fraud at the level of a single contract instruction.
Arbitrum, according to Goldfeder, “resolves disputes interactively and minimizes the amount of on-chain computation required to resolve disputes.”