Since the arrival of CryptoKitties in 2017 and DeFi Summer in 2020, the industry is still grappling with how to make blockchains better, cheaper, and faster.
And this is precisely where Offchain Labs’ chief strategy officer A.J. Warner and his team are setting up camp: solving the famed blockchain trilemma.
The blockchain trilemma refers to the three core challenges developers face when building a blockchain: scalability, security, and decentralization. Gains made in one of these areas are concessions in another.
With so many options for trade-offs, there have been several experiments across the layer-1 space, ranging from Ethereum to Solana, Algorand, and Celestia.
“Ethereum solves that by focusing on security, decentralization, and outsourcing throughput to rollups, that’s their version,” Warner told Decrypt.
As for a network like Solana, it's attempting to have “all of this throughput exist in a single environment, and make sure that the thing is also secure and decentralized,” he said. “I’m not even sure if this might defy the law of physics.”
As for a solution to the trilemma, the developer team at Offchain Labs is working hard to scale Ethereum with its rollup-based network called Arbitrum.
Arbitrum Airdrops $120 Million in ARB to DAOs
At $5.68 billion in total value locked, a measure of how much money is sloshing around a protocol or dapp, Arbitrum is head and shoulders above the competition. In terms of speed, it’s certainly an improvement, too, with a measured daily seven transactions per second over the last week.
Compared to payment heavyweights, like Mastercard or Visa, however, it’s still far from replacing the traditional competition.
“If somebody solves the trilemma in a more efficient way, that would be the big breakthrough,” said Warner. “But, I don't think we're so close.”
Alongside solving one of the industry’s trickiest problems, such a solution would also have to earn the mindshare of the developer masses.
“You don't have to just solve it,” he told Decrypt at EthCC Paris this year. “It has to be a huge order of magnitude, an experience that will inspire confidence in both users and developers.
Arbitrum’s ‘holy grail’
Warner says that one of the areas the Arbitrum team is “really excited” to be working on is permissionless validation, which he describes as “pretty close to the holy grail of rollup technology.”
Rollups are a type of scaling solution that “rolls” multiple transactions together. The final transaction is presented to the blockchain as a single transaction.
There are two main types of rollups: Optimistic and zero knowledge.