Arbitrum, the largest Ethereum layer-2 scaling solution by total value locked (TVL), is taking steps towards decentralization. In an update on April 16, Offchain Labs–Arbitrum developers–said they have deployed the permissionless version of their fraud proofs, dubbed Bounded Liquidity Delay (BOLD), to testnet.
Ethereum Layer-2s Are Popular, But There Is A Big Problem
Over the past few years, Ethereum layer-2 platforms have grown in popularity. As of April 17th, according to L2Beat, these systems manage over $37 billion worth of assets. With options like Arbitrum, Optimism, and Base, developers and users can now make transactions at minimal cost.
Although these platforms are well-known and have enormous total value locked, the majority of their anti-fraud solutions are still under development. In general, every transaction made across the chains necessitates confirmation from a network of miners or validators, based on the specific consensus mechanism.
In simpler terms, this process varies at the second level by requiring the rerouting of transactions for processing outside the main network. It’s impossible to verify the authenticity of queued transactions before they are bundled and verified on the blockchain.
Arbitrum and similar optimistic rollup projects offer fraud-prevention methods that are essential for layer-2 solutions. These mechanisms, which will include BOLD once it’s live on Arbitrum, act as a safeguard to verify the authenticity of transactions conducted off-chain. This is crucial for preserving transaction accuracy while allowing for efficient processing outside the main blockchain.
According to the fundamental concepts of blockchain technology, BOLD aims to operate in a decentralized manner. This means that members of the community will manage nodes instead of the current configuration. In contrast, Arbitrum’s transaction validation is currently centralized and relies on a small number of validators for this function.
Arbitrum Deploys BOLD In Testnet, ARB Prices Falling
Using BOLD on the testnet, Arbitrum invites anyone to join in securing the network and confirming Ethereum withdrawals. This step is essential for fostering a more dispersed community and enhancing the platform’s resilience.
Arbitrum is the initial Ethereum layer-2 platform to introduce fraud proofs in its testnet. Meanwhile, Ryan Watts of Optimism announced in a post that they are planning to develop a decentralized fraud-proof system for the second biggest Ethereum layer-2 by total value locked (TVL), which is Optimism.
Even with this major milestone, ARB prices are stable and under pressure.
Related Reading: Crypto Analyst Says Don’t Buy Altcoins Just Yet – Here’s Why
The price of the token has dropped by half since its peak in March 2024 at current market rates. It continues to face significant selling pressure. However, if buyers manage to counteract the sell-off that occurred on April 12 and 13, the token could bounce back strongly and potentially reach $1.5 again.
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2024-04-18 04:16