The more people use blockchains, the more data they need to process. For this to be possible, the scaling problem must be solved. The project Arbitrum tries that for Ethereum. With a cash injection of 3.7 million US dollars, the early release is nothing in the way. From higher speed, lower thresholds and the start-up Offchain Labs.
It’s another of those blockchain industry startups that have set a big goal. Offchain Labs, a New Jersey company, is about to release Arbitrum. Arbitrum can be thought of as a second layer compatible with each blockchain, second level on the first level, so sitting on the actual blockchain and offering several advantages. The young company can now look forward to a cash injection of 3.7 million US dollars. Offchain Labs was joined by others from Pantera Capital, an investor in the blockchain sector.
The team behind Offchain Labs is highly decorated. Finally, Ed Felton is co-founder, a professor of computer science at the elite Princeton University and a former White House CTO. The team also includes a number of PhD technocrats, including Steven Goldfeder and Harry Kalodner. Ed Felton was more than confident in an interview with the news portal cryptoninjas.net:
“With Arbitrum, we’ve created a protocol that acts as a second layer on any block chain, allowing it to process programs and transactions off-chain, either through sidechains or state channels, through enhanced privacy and scalability, coupled with lower levels of bandwidth Cost of running a smart contract, Arbitrum will be of tremendous benefit to developers and companies.
“We believe it will unleash a new wave of quality, blockchain apps and services, and Arbitral has the potential to improve blockchains by not only increasing speed many times, but also because it increases and the flood of information for businesses and individuals is kept to a minimum without the latter losing sight of the big picture, and developers can benefit from it because it’s compatible with Ethereum, allowing them to push services, dApps, or tokens from ethereum to arbitrage exploiting the benefits of [Arbitrum] – better privacy and scalability.
Lightning for Ethereum
The prime example of off-chain state channels is the private payment channels in Bitcoin’s Lightning Network. This is nothing more than a second layer on the actual Bitcoin Blockchain. As can be seen from the quote, Arbitrum is primarily an analog scaling solution for Ethereum. This should create additional incentives for programmers and companies. How important such a solution is, we have captured elsewhere.
When the Arbitrum prototype is launched, Offchain Labs first wants to envisage the gaming industry, financial apps, and federated blockchains to establish arbitrage in the marketplace. Slightly smaller rolls are seen by Joey Krug, Deputy Investment Manager at Pantera Capital, who bakes the Offchain Labs team:
“For Pantera [Capital], one of the biggest problems of the blockchain industry is in the scaling debate of dApps.” The team behind Offchain Labs has developed a novel solution to this problem with Arbitrum, and we are extremely confident that the potential of this platform will be the same The unique features of Arbitrum make it a great solution to the scaling problem, with Arbitrum acting as the second level.