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Fraud proof system is fully deployed but is not yet permissionless as it requires Validators to be whitelisted.

Arbitrum is an Optimistic Rollup that aims to feel exactly like interacting with Ethereum, but with transactions costing a fraction of what they do on L1. Centralized Sequencer receives users' transactions and regularly sends the transaction batch to mainnet Ethereum. Independent Validators (currently whitelisted) read transaction batches from L1, execute them and submit a resulting L2 state root to L1. Any other Validator can challenge the state root within the challenge window (7-days). The challenge will result in an interactive fraud proof game that will be eventually settled by L1. As long as there is at least one honest Validator, users are guaranteed that eventually correct L2 state root will be published to L1. If Sequencer is censoring users transactions, it is possible to force the transaction via L1 queue. If no Validator publishes L2 state root within 7 days, the Validator whitelist is dropped and anyone can take over as a new Validator.

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Risk summary


Fraud proofs ensure state correctness

After some period of time, the published state root is assumed to be correct. For a certain time period, usually one week, one of the whitelisted actors can submit a fraud proof that shows that the state was incorrect.

  • Funds can be stolen if none of the whitelisted verifiers checks the published state. Fraud proofs assume at least one honest and able validator (CRITICAL).

  1. Executing and Securing the Chain - Arbitrum documentation
  2. RollupUserFacet.sol#L281 - Etherscan source code, onlyValidator modifier

All transaction data is recorded on chain

All executed transactions are submitted to an on chain smart contract. The execution of the rollup is based entirely on the submitted transactions, so anyone monitoring the contract can know the correct state of the rollup chain.

  1. Submitting Transactions - Arbitrum documentation


The system has a centralized sequencer

While proposing blocks is open to anyone the system employs a privileged sequencer that has priority for submitting transaction batches and ordering transactions.

  • MEV can be extracted if the operator exploits their centralized position and frontruns user transactions.

  1. Validators - Arbitrum documentation
  2. If the sequencer is malicious - Arbitrum documentation

Users can force any transaction

Because the state of the system is based on transactions submitted on-chain and anyone can submit their transactions there it allows the users to circumvent censorship by interacting with the smart contract directly.

  1. Submitting Transactions - Arbitrum documentation


Regular exit

The user initiates the withdrawal by submitting a transaction on L2. When the block containing that transaction is finalized the funds become available for withdrawal on L1. The process of block finalization usually takes several days to complete. Finally the user submits an L1 transaction to claim the funds. This transaction requires a merkle proof.

  1. L2 to L1 Messages Lifecycle - Arbitrum documentation
  2. Rules for Confirming or Rejecting Rollup Blocks - Arbitrum documentation
  3. Mainnet for everyone - Arbitrum Blog

Tradeable Bridge Exit

When a user initiates a regular withdrawal a third party verifying the chain can offer to buy this withdrawal by paying the user on L1. The user will get the funds immediately, however the third party has to wait for the block to be finalized. This is implemented as a first party functionality inside Arbitrum's token bridge.

  1. Tradeable Bridge Exits - Arbitrum documentation

Other considerations

EVM compatible smart contracts are supported

Arbitrum One uses Nitro technology that allows running fraud proofs by executing EVM code on top of WASM.

  • Funds can be lost if there are mistakes in the highly complex Nitro and WASM one-step prover implementation.

  1. Inside Arbitrum Nitro

Permissioned Addresses

The system uses the following set of permissioned addresses:

Arbitrum MultiSig 0xC234…0941

The admin of all contracts in the system, capable of issuing upgrades without notice and delay. This allows it to censor transactions, upgrade bridge implementation potentially gaining access to all funds stored in a bridge and change the sequencer or any other system component (unlimited upgrade power). It is also the admin of the special purpose smart contracts used by validators.

These addresses are the participants of the 4/6 Arbitrum MultiSig.

Sequencer 0xa4b1…253f

Central actor allowed to set the order in which L2 transactions are executed.

They can submit new state roots and challenge state roots. Some of the validators perform their duties through special purpose smart contracts.

Smart Contracts

A diagram of the smart contract architecture
A diagram of the smart contract architecture

The system consists of the following smart contracts:

ProxyAdmin (1) 0x5547…2dbD

This contract is an admin of SequencerInbox, Bridge, Outbox and ChallengeManager contracts. It is owned by a 4-of-6 multisig.

Main contract implementing Arbitrum One Rollup. Manages other Rollup components, list of Stakers and Validators. Entry point for Validators creating new Rollup Nodes (state commits) and Challengers submitting fraud proofs.

Main entry point for the Sequencer submitting transaction batches to a Rollup.

Entry point for users depositing ETH and sending L1 --> L2 messages. Deposited ETH is escowed in a Bridge contract.

Contract managing Inboxes and Outboxes. It escrows ETH sent to L2. This contract stores the following tokens: ETH.

ProxyAdmin (2) 0x9aD4…0aDa

This is a different proxy admin for the three gateway contracts below. It is also owned by a 4-of-6 multisig..

Router managing token <--> gateway mapping.

Main entry point for users depositing ERC20 tokens. Upon depositing, on L2 a generic, "wrapped" token will be minted. This contract can store any token

Main entry point for users depositing ERC20 tokens that require minting custom token on L2. This contract can store any token

L1DaiGateway 0xD3B5…3011

Custom DAI Gateway, main entry point for users depositing DAI to L2 where "canonical" L2 DAI token managed by MakerDAO will be minted. Managed by MakerDAO.

L1Escrow 0xA10c…9400

DAI Vault for custom DAI Gateway managed by MakerDAO. This contract stores the following tokens: DAI.

The current deployment carries some associated risks:

  • Funds can be stolen if a contract receives a malicious code upgrade. There is no delay on code upgrades (CRITICAL).

Social media@OffchainLabs@arbitrumoffchainlabsdiscord.gg
Source codegithub.com/OffchainLabs/arbitrumgithub.com/OffchainLabs/nitrogithub.com/OffchainLabs/arb-os


Nitro Upgrade

2022 Aug 31st

Upgrade is live, introducing new architecture, increased throughput and lower fees.

Learn more

Odyssey paused

2022 Jun 29th

Due of the heavy load being put on the chain, Odyssey program got paused.

Learn more

Odyssey started

2022 Jun 21st

Incentives program to onboard new users has started.

Learn more

Mainnet for everyone

2021 Aug 31st

Whitelist got removed, there are no restrictions on who can transact with the network.

Learn more