Arbitrum Currently Leads Over Optimism, but Competition Expected to Intensify in 2024

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Ponyo
Research Analyst/
Xangle
May 11, 2023

Translated by LC

Table of Contents

Intro

1. The Past: Arbitrum and Optimism with Different Management Goals and Backgrounds

1-1. The Founders of Arbitrum and their Princeton Roots

1-2. Optimism’s Roots Lie in a Non-Profit Ethereum Research Foundation

1-3. Different Backgrounds May Have Shaped the Direction of the Two Solutions

2. Present: Arbitrum's Real Yield Narrative Sets it Apart

2-1. Ecosystem Activity Comparison through On-Chain Metrics

2-2. Arbitrum’s User-Focused Approach Sets It Apart from Other L2 Solutions

3. Future: Optimism and Arbitrum in a Battle for L2 Dominance

3-1. Superchain vs Arbitrum Orbit

3-2. RPGF vs DAO-Driven Funding

Closing Thoughts

 

 

 

 

Intro

As the battle for the top spot in Ethereum's Layer 2 (L2) ecosystem heats up, Arbitrum and Optimism are emerging as the top contenders. Both solutions are poised to make significant contributions to expanding Ethereum's reach in the future. While the technical potential of Optimal Rollovers (ORs) was discussed in a previous article titled Would Optimistic Rollup Remain as a Viable Candidate Even After ZK Rollup Is Fully Developed? back in August 2022, this article will delve into the history and current state of both Arbitrum and Optimism, and provide insights into the future of these two projects.

* Please note that this article will not delve into technical discussions of rollups; for an understanding of L2 types and principles, including OR, please refer to "Ethereum Layer 2 Solutions."

1. The Past: Arbitrum and Optimism with Different Management Goals and Backgrounds

“The Ethereum ecosystem is likely to be all-in on rollups (plus some plasma and channels) as a scaling strategy for the near and mid-term future.” - Vitalik Buterin

Although rollups gained prominence in the crypto space in 2020 when the Ethereum Foundation shifted the network's long-term focus towards them (rollup-centric Ethereum roadmap, 2020), discussions about L2 solutions have been ongoing since 2016-2017. While concepts such as rollups and danksharding were not yet in existence, the Ethereum and Bitcoin communities had recognized for some time that Ethereum's scalability limitations could potentially hinder its mass adoption. In 2018, the co-founders of Offchain Labs and Optimism PBC began working on L2 solutions, with both projects taking different approaches and management goals.

Source: Rollup-centric Ethereum roadmap by Vitalik Buterin

1-1. The Founders of Arbitrum and their Princeton Roots

Offchain Labs, the team behind Arbitrum, was co-founded by Ed Felten, Steven Goldfeder, and Harry Kalodner, all of whom met while studying at Princeton University in the early 2010s. Ed Felten, a well-known computer science professor, had been teaching at Princeton since 1993, while Steven Goldfeder and Harry Kalodner were his students. During their time at Princeton, Goldfeder, and Kalodner developed a keen interest in cryptocurrencies and often pursued dissertation topics related to Bitcoin, cryptography, and blockchain. In 2016, they co-authored a book on Bitcoin and Cryptocurrency Technologies, which provided a comprehensive overview of Bitcoin and blockchain, including a chapter on Bitcoin Layer 2. The trio founded OffChain Labs in 2018, with Felten leaving his position as CTO at the White House to join the company full-time.