Arbitrum's Bold Journey Forward

Offchain Labs just dropped a massive upgrade for the Arbitrum tech stack, bringing it closer than ever to the coveted “Stage 2” rollup designation! Say hello to BoLD – a newly deployed proving protocol that opens the floodgates for permissionless validation and crushes centralization concerns.

Stage 2 rollups do indeed exist, but they have struggled to achieve meaningful adoption. The largest such example, DeGate’s ZK rollup, custodies less than 1% of Arbitrum’s value and ranks 21st against competitive L2s in terms of total value secured.

With Arbitrum’s BoLD deployment, its L2 ecosystem is on the brink of realizing Vitalik’s scaling endgame: truly decentralized and performant blockspace for the masses. This major technical achievement could crown the Arbitrum tech stack as king among L2s and stands to strengthen the credible neutrality of Ethereum’s rollup construct.

Let’s break down Arbitrum’s latest upgrade and discuss the lone hurdle the network must overcome to fully decentralize. 👇

💪 What is BoLD?

Previously, the ability to validate an Arbitrum chain was restricted to whitelisted parties approved by the ArbitrumDAO. These select validators bore all responsibility for posting updates about the Arbitrum network to Ethereum, challenging inaccurate claims made by other validators, and confirming valid attestations.

Although this trusted validation scheme mitigated the risk of “delay attacks,” in which malicious entities infinitely spam the fraud resolution process to prevent the publication of Arbitrum state roots on Ethereum, it imposed unwanted centralization risk vectors that prevented anyone from permissionlessly challenging inaccurate claims made by network validators.

Arbitrum’s BoLD, short for Bounded Liquidity Delay Protocol, ensures that all validation disputes are resolved within a fixed period (currently equivalent to two challenge periods of 6.4 days, plus a two-day grace period for the Security Council to intervene if necessary), effectively nullifying the risk of a delay attack.

To ensure that anyone with the requisite technical sophistication can permissionlessly challenge incorrect Arbitrum state roots, BoLD enables multiple parties to initiate the fraud challenge process by pooling capital and proposing their own version of the correct chain history.

In addition to the good feeling they’ll get from altruistically preserving the correct version of Arbitrum’s onchain history, honest actors are financially incentivized to challenge an incorrect state by the “Defender Bounty,” which allocates 1% of a malicious state root proposer’s funds to winning challenger groups.

🧐 What’s Next For Arbitrum?

In this bold new world, anyone can validate, propose, and defend an Arbitrum chain’s state without permission.

While Arbitrum will retain its Security Council – essentially a multi-signature wallet that can unilaterally override any decision and make instantaneous chain changes at any time – and thus cannot be considered a Stage 2 rollup at this time, the launch of BoLD permissionless state validation puts Arbitrum on the precipice of achieving the designation.

As long as its Security Council has the ability to alter network outcomes in the absence of bugs, it will be impossible for Arbitrum to fully decentralize, but with the groundwork for the transition having already been laid, it may only be a matter of time before Arbitrum becomes the first rollup of significance to achieve Ethereum’s scaling endgame!