Optimism vs. Arbitrum - a comprehensive comparison

background introduction

Optimism and Arbitrum are two of the largest Layer 2 (L2) solutions utilizing Optimistic rollup technology to scale the Ethereum network.

Source: https://l2fees.info/

Currently, Ethereum's high transaction fees and limited throughput of about 15 transactions per second (TPS) severely limit its scalability.

To solve this problem, a rollup extension scheme is proposed, which is divided into zero-knowledge (ZK) and optimistic rollup; this paper will focus on the latter. The two most famous Optimistic rollups, Optimism and Arbitrum, allow Ethereum or ERC-20 token transactions with a throughput of about 2000-4000 TPS, a fraction of the base gas cost of Ethereum.

Optimistic Rollup

Optimistic rollup works by executing transactions on the second-tier rollup chain, while a node called a sequencer packages and then submits transaction status data to the first-tier. This method of processing transactions has the advantage of compressing the data published to the Ethereum mainnet while amortizing the gas costs across each rollup batch of transactions.

Also, unlike sidechains, the rollup scaling solution leverages the layer-1 blockchain consensus mechanism, allowing rollups to benefit from the security of large networks like Ethereum. Also, since transaction throughput scales on the first layer, it also scales on the rollup layer. Therefore, rollup has the potential to increase transaction throughput to about 100,000 TPS when combined with ETH 2.0.

Optimistic vs. ZK rollup

Unlike Optimistic rollups, which use a dispute resolution process to secure transactions, ZK rollups utilize zero-knowledge mathematical proofs for transaction verification. Some key differences between them are as follows:

Due to its security model, Optimistic rollups have a longer withdrawal period for funds.

Optimistic rollup is less computationally complex, resulting in lower hardware requirements for second-tier nodes.

Ethereum Virtual Machine (EVM) compatibility is much simpler on Optimistic rollups than on ZK rollups.

Currently, on Optimism and Arbitrum, centralized serializers must be trusted to publish valid transaction data to the first layer. In theory, this is a security risk, since at least one honest party between the sequencer and the verifier must be assumed. However, sequencers are incentivized to act honestly, so in reality, the risk is minimal.

Optimistic rollup is the more popular of the two protocols, with Optimism and Arbitrum controlling about 71% of the second-tier market share.

Arbitrum vs. Optimism

While Arbitrum and Optimism are both classified as Optimistic rollups, they do have some basic differences.

First, they utilize different dispute resolution processes to validate transactions. Optimism uses a single round of fraud proofs performed on the first layer, while Artibrum uses multiple rounds of fraud proofs performed off-chain. Arbitrum's multi-round fraud proofs are the more advanced of the two proofs, and are cheaper and more efficient than single-round proofs.

Additionally, while both Optimism and Arbitrum are EVM compatible, Optimism uses Ethereum’s EVM, while Arbitrum runs its own Arbitrum Virtual Machine (AVM). This results in Optimism having only the Solidity compiler, while Arbitrum supports all EVM-compiled languages (Vyper, Yul, etc.).

ecosystem comparison

Source: https://l2beat.com/#projects

The technical differences between Arbitrum and Optimism are very "intrinsic" and of little relevance to the average user. However, what differs very markedly is the size of their ecosystems and communities:

As of this writing on June 28, 2022, Arbitrum has a total value locked (TVL) of $2.09 billion, more than double Optimism's $807 million.

Arbitrums’ official Twitter and Discord currently have 255,000 followers and 95,000 members, respectively, while Optimism has 214,000 Twitter followers and 44,000 Discord server members.

While Optimism's ecosystem is slightly more mature, it is smaller of the two with only 50+ dapps compared to 80+ dapps on Arbitrum.

The two protocols also share many DEXs, DApps, and lending protocols. The largest platform on Arbitrum is GMX, a decentralized spot and perpetual contract exchange with the advantage of low swap fees and zero-slippage trading. The second largest platform is dForce, a DeFi infrastructure protocol that provides lending, trading, and staking services.

Source: https://defillama.com/

On Optimism, Synthetix, TVL's largest protocol, is a derivatives liquidity protocol that allows the creation of synthetic assets on the blockchain. In addition, Velodrome Finance is a decentralized exchange dedicated to the Optimism protocol, aiming to ensure better interoperability between DeFi protocols on Optimism.

community initiative

Another notable difference between Optimism and Arbitrum is the type of initiatives they undertake to engage their respective communities.

Source: community.optimism.io

Most recently, Optimism airdropped its governance token OP on June 1, 2022. This will extend Optimism's governance to its community members through the creation of the Optimism Collective and the Optimism Foundation.

Optimism Collective is a DAO, which itself is divided into two parts, Citizen's House and Token House. Members join by earning OP, and will receive benefits such as voting rights for protocol upgrades, project incentives, and public product funding.

The Optimism Foundation incorporates members of the Optimism PBC team (now ex-members) and will act as stewards of the Optimism Collective, running governance experiments on their behalf.

Arbitrum, on the other hand, is not governed by a DAO, the protocol is run entirely by Offchain Labs. To get their community involved, they recently launched Arbitrum Odyssey, an 8-week NFT campaign.

Arbitrum Odyssey is an event jointly launched by Arbitrum and NFT artists Ratwell and Sugoi. Participants must complete various tasks on the chain within eight weeks to win prizes. For example, a user might be asked to provide liquidity on one protocol, exchange it on another, and so on.

Source: twitter.com/arbitrum

For example, the first week will require users to deposit ETH into Arbitrum through any of the bridges and fiat deposit channels shown in the above diagram. Users using the bridge will also be able to earn a rewarding NFT if they have the most transaction volume at the end of the week.

Development Roadmap

Another difference between Optimism and Arbitrum is their development roadmap. Optimism clearly lays out its development roadmap to 2024, some of which include enabling next-generation interactive fraud proofs, sharded rollups, and decentralized sequencers.

Neither on its website nor on Github, Arbitrum has announced any future plans. Nonetheless, it can be speculated that Offchain Labs, a competitor to Optimism, may be tempted by the OP’s launch to launch its own governance token at some point in the future.

epilogue

In my opinion, Optimism and Arbitrum are objectively indistinguishable, but they both have their own advantages.

I found that the marketing ability of the Arbitrum team is outstanding by rapidly expanding the influence of social media and attracting DApp developers to join their chain. In its current state, Arbitrum's rollup architecture outperforms Optimism in terms of both security and longevity due to its superior fraud proof mechanism and proprietary virtual machine.

One thing I really like about the Optimism team is that they put a lot of emphasis on protocol decentralization and governance, more so than the Arbitrum team. It's also currently cheaper to trade and swap tokens on Optimism, and their promising future plans could put them at the forefront of Optimistic rollup innovations, which could end up turning the market in their favor.

This article is compiled from https://cn.tokeninsight.com/en/research/market-analysis/optimism-vs.-arbitrum-a-complete-comparison

By 0xLawrence, Blockchain, Cryptocurrency and Web3 Researcher and Computer Science Student