The latest fundraising led by Lightspeed Venture Partners pouts Offchains Labs into the league of unicorn startups as valuations move past $1.2 billion.
On Tuesday, August 31, Arbitrum – the popular Ethereum scaling solution from Offchain Labs – announced the launch of its mainnet Arbitrum One. Interestingly, the announcement also comes at a time when the project has raised $120 million in Series B funding.
The launch of Arbitrum One will allow users to interact with decentralized apps (DApps) on Arbitrum. So far, only developers only had the facility to launch and test apps on Arbitrum. However, this facility is now available to users as well said Offchain Labs co-founder Steven Goldfeder.
Arbitrum works as a Layer 2 scaling solution handling far more transactions than the native Ethereum blockchain network. It processes all transactions on a sidechain using optimistic rollups technology. Besides, it regularly settles these transactions while batching them to the main Ethereum blockchain.
Arbitrum is the first scaling solution from Offchain Labs. The project is working to bring more such solutions to the Ethereum blockchain. Speaking of the development with The Block, Goldfeder said:
“We will use the newly raised capital to grow our team and continue to invest heavily in R&D”.
Currently, Offchain Labs is hiring across multiple areas. However, Goldfeder said that a majority of the hiring is happening in engineering. Post the Series B funding, Offchain Labs has raised a total of $124 million to date. The recent funding also puts Offchain Labs in the ‘unicorn’ category with valuations at $1.2 billion.
Lightspeed Venture Partners was leading the recent Series B funding for the project. As a result, Lightspeed co-founder Ravi Mhatre shall be joining the project’s board. Some of the other prominent players joining the funding are Ribbit Capital, Polychain Capital, Pantera Capital, Redpoint Ventures, Mark Cuban, and Alameda Research.
Arbitrum Competing with Other Ethereum Scaling Solutions
A number of Ethereum scaling solutions have emerged in the market. Another Ethereum scaling startup Optimism uses the same optimistic rollups technology to facilitate more transactions. However, it competes with Arbitrum using a different approach of implementation.
For e.g. projects using optimistic rollups technology for the Layer 2 network have to confirm if the transactions are valid and then transfer the transaction data to Ethereum. However, if they intentionally or unintentionally validate a wrong transaction, anyone on the Ethereum mainnet can challenge them.
This is where the two players – Arbitrum and Optimism – differ. Optimism will limit the size of smart contracts that can be re-executed on the Ethereum blockchain. On the other hand, Arbotrum will allow users to dissect smart contracts into pieces. thus, it can prove any fraud at a single contract instruction.
The Offchain co-founder explained that Arbitrum “resolves disputes interactively and minimizes the amount of on-chain computation necessary to resolve disputes.”