# Arbitrum: Scalable, private smart contracts Content type: Research Paper Summary: This paper presents Arbitrum, an optimistic rollup system designed to significantly enhance the scalability and privacy of smart contracts on existing blockchain platforms, particularly Ethereum. Arbitrum operates by executing smart contract computations off-chain on an Arbitrum Virtual Machine (AVM), drastically reducing the load on the main chain. Security is maintained through a fraud proof mechanism: any participant can challenge the correctness of an off-chain computation, triggering a disp Key concepts: Harry Kalodner, Steven Goldfeder, Xiaoqi Chen, S. Matthew Weinberg, Edward W. Felten, layer 2, optimistic rollup, ethereum, scalability, smart contracts, fraud proofs, off-chain computation, evm
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Arbitrum: Scalable, private smart contracts

Harry Kalodner, Steven Goldfeder, Xiaoqi Chen, S. Matthew Weinberg, Edward W. Felten

Academic PaperJanuary 2018

Abstract

This paper presents Arbitrum, an optimistic rollup system designed to significantly enhance the scalability and privacy of smart contracts on existing blockchain platforms, particularly Ethereum. Arbitrum operates by executing smart contract computations off-chain on an Arbitrum Virtual Machine (AVM), drastically reducing the load on the main chain. Security is maintained through a fraud proof mechanism: any participant can challenge the correctness of an off-chain computation, triggering a dispute resolution process on the main chain where the disputed computation is re-executed. This 'optimistic' approach assumes transactions are valid unless proven otherwise, allowing for high throughput and reduced transaction costs. The protocol also offers privacy for the state of contracts and transaction data within an Arbitrum chain, only revealing it if a dispute arises. Arbitrum represents a foundational contribution to Layer 2 scaling solutions, demonstrating a robust and practical method to scale smart contract execution while inheriting the security of the underlying Layer 1 blockchain.

Key Findings

  • 1Arbitrum introduces an optimistic rollup system for scaling smart contracts off-chain.
  • 2Computations are performed on an Arbitrum Virtual Machine (AVM), with results posted to the main chain.
  • 3Security relies on fraud proofs, allowing anyone to challenge incorrect off-chain computations.
  • 4This method significantly increases throughput and reduces transaction costs compared to Layer 1.
  • 5It provides privacy for contract state and transaction data until a dispute necessitates disclosure.

Topics

layer 2optimistic rollupethereumscalabilitysmart contractsfraud proofsoff-chain computationevm
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Citation

Harry Kalodner, Steven Goldfeder, Xiaoqi Chen, S. Matthew Weinberg, Edward W. Felten (2018). Arbitrum: Scalable, private smart contracts. Academic Paper. https://www.usenix.org/system/files/conference/usenixsecurity18/sec18-kalodner.pdf

BibTeX

@misc{arbitrumscalable2018,
  title = {Arbitrum: Scalable, private smart contracts},
  author = {Harry Kalodner and Steven Goldfeder and Xiaoqi Chen and S. Matthew Weinberg and Edward W. Felten},
  year = {2018},
  howpublished = {\url{https://www.usenix.org/system/files/conference/usenixsecurity18/sec18-kalodner.pdf}},
}

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