What’s the difference between Optimism and Arbitrum?

Optimistic rollups have been touted as a promising scalability solution for Ethereum. In general, optimistic rollups batches transactions and submit said batches as a single transaction on Ethereum, thereby saving gas costs for users while increasing transaction throughput of the base chain. In the event of a fraudulent transaction, that transaction will then be challenged and be executed on the base layer. If the transaction is proven invalid, the state of the optimistic rollup will be reverted to before the fraudulent transaction.

As such, it is necessary to develop a different architecture to handle the batched transaction, that is, the virtual machine on which transactions are sequenced and batched before submission. To date, the largest two solutions by total value locked (TVL) are Arbitrum and Optimism, developed by Offchain Labs and Optimism Public Benefit Corporation (PBC), respectively. This piece will take a deeper look at some of the subtle differences behind the design of both optimistic rollups. A closer look at the TVLs and statistics behind the adoption of these two protocols were covered in a prior piece.