Offchain Labs, an enterprise-focused startup, is launching an Alpha version of its Ethereum scaling solution Arbitrum today. It’s also announcing funding from Coinbase Ventures, the investment arm of the popular exchange. The release didn’t disclose the amount, but said the funds are designed to accelerate development and encourage more developers to jump onboard.

The New Jersey-based startup, led by former White House Deputy Chief of Technology Ed Felten, also raised $3.7 million in seed funding back in April.

“Arbitrum makes Ethereum contracts faster, more scalable, and more private. It’s compatible with Ethereum, so it’s easy for developers to adopt,” Felten told Decrypt. 

“Our main challenges have been in engineering a system that is reliable and secure enough for use, and eliminating performance bottlenecks.” 


Ethereum is the most popular public blockchain for building decentralized applications (dapps) and smart contracts. Many enterprises think so too, but there are a sizeable number of companies that balk at building dapps on a public chain hampered by scaling issues. So while a transformation to Ethereum 2.0. is in progress, ushering in vastly improved transactions speeds and privacy, Ethereum developers and independent startups are racing to build scaling solutions to plug the gap, and also offer enterprises the security and reliability they crave. 

Spun out of research from Princeton University, Offchain Labs claims that its blockchain-agnostic Arbitrum can be easily integrated into any Ethereum application, enabling a processing speed of over 500 transactions per second, with code and transactions executed off-chain through either sidechains or state channels. 

Contracts are developed using Solidity code, just like regular Ethereum dapps, but are compiled by the Arbitrum compiler. A bridge enables the network to communicate with the Ethereum mainchain. 

But perhaps the most interesting and controversial feature is the platform’s “AnyTrust Guarantee,” which, according to Offchain Labs, ensures that as long as a single validator is online and acting honestly, the dapp will execute correctly, even if all other validators attempt to cheat the system. 


According to the project’s academic paper this works because any one honest manager can force the system to behave according to its code. Anyone interested in the outcome can serve as a manager or can appoint someone they trust. 

“This contrasts with other systems that try to gain scalability through a majority voting system among validators. In these settings it becomes a complicated calculation on knowing who to trust,” Felten explained to Forbes.

In 2018, Deloitte claimed that up to 95% of companies were investing in blockchain tech projects. But enterprises often require information confidentiality so private blockchain utilization has been on the rise, with many enterprises not yet convinced about moving their system architectures onto a decentralized, public network.

Offchain Labs is seeking to change their minds. 

The Ethereum community is, of course, engineering its own solutions, notably under the PegaSys project. 

Enterprise, it seems, will soon have the option to use an Ethereum that fulfils all their needs.

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