Arbitrum is on the verge of a significant upgrade, moving towards full decentralization as an Ethereum Layer-2 rollup. The Arbitrum community is currently contemplating a snapshot temperature check on whether to advance an improvement proposal to bring BOLD, a new dispute resolution protocol, to Arbitrum One and Nova. This move is expected to enhance the security of Arbitrum chains and remove the restrictions on who can become a validator.
BOLD and Its Impact
BOLD, which stands for “Bounded Liquidity Delay,” aims to decentralize the Arbitrum technology stack further and make the network more secure. It ensures that any single honest party can always defend against malicious claims to an Arbitrum chain’s state. Implementing BOLD would make validation permissionless, allowing anyone to become a validator, and reduce the risk of delay attacks that can prevent users from withdrawing their assets from the L2 and Ethereum’s base layer.
Steven Goldfeder, co-founder of Offchain Labs, stated, “Validation is open for everyone, which means someone’s sitting in their basement, it’s like, ‘Hey, I disagree with what this validator said. I don’t need to trust you. I can just validate and do this myself.’”
Moving Towards Stage 2 Rollup
Arbitrum’s governance proposal aims to upgrade its smart contracts to use BOLD, thus transitioning from a Stage 1 to a Stage 2 Ethereum rollup. This would place Arbitrum closer to full decentralization, eliminating the need for a security council to oversee transactions. The ongoing temperature check, which started on Thursday, is a step towards making Arbitrum one of the first rollups to reach this advanced stage of decentralization.
Currently, most rollups, including Arbitrum, have some form of centralization, typically controlled by a multisig security council. Stage 1 rollups, such as Optimism, verify transaction validity before finalizing them on Ethereum’s base layer through mechanisms like fault proofs. However, these rollups still maintain a level of centralization with a security council that can override the network’s proof scheme if needed.
Stage 2 networks, as defined by Ethereum co-founder Vitalik Buterin, must not have any group of actors that can post a state root other than the output of the code, meaning smart contracts manage the rollup’s output with minimal human intervention.
Community and Governance
If the governance proposal to implement BOLD is approved, it will mark a significant milestone for Arbitrum, enabling permissionless validation and moving closer to full decentralization. The proposal has received overwhelming support, with 99.9% of votes cast in favor of the upgrade. If passed, ArbitrumDAO will initiate a public audit program before conducting a formal on-chain governance vote.
Arbitrum’s governance token, ARB, currently has a market cap of $2.7 billion. The cryptocurrency has seen a decline of 7.2% over the past year and 15.1% over the past week, trading at around $0.93.
