Arbitrum (ARB) vs Optimism (OP) vs Polygon (MATIC): Which Is Best?

As we can see, Arbitrum, Optimism, and Polygon are protocols that utilize different technologies to scale Ethereum. Before diving into these protocols, we need to understand the underlying scaling solutions.

What is an optimistic rollup and how does it work?

An optimistic rollup is an off-chain layer 2 scaling solution for Ethereum and is managed by smart contracts. It works by executing transactions off the Ethereum main chain. These transactions are then bundled into different batches and submitted to the main chain.

This approach assumes that these transactions are valid, thus no proof of validity is published. However, after the submission of transactions, there is a period of time during which the results can be challenged if fraud is suspected.

In order to provide incentives for good behavior, both the optimistic validator and the party who submits fraud-proof must provide a bond. This bond is subject to slashing if fraudulent behavior is discovered.

What is a zero-knowledge rollup and how does it work?

Similar to an optimistic rollup, a zero-knowledge rollup (zk-rollup) is also an off-chain layer 2 solution for Ethereum where transactions are executed off-chain and batched. The major difference is that zk-rollup validators must summarize the changes needed for each batch and also produce validity proofs to prove that the changes are correct.  

What is a sidechain and how does it work?

A sidechain is not a L2 scaling solution because it is an independent blockchain with its own block parameters and consensus mechanism. It is connected to the Ethereum network via a two-way bridge so users can move their funds between Ethereum and the sidechain.

Sidechains that are EVM (Ethereum Virtual Machine)-compatible can support native Ethereum dApps (decentralized applications) without much trouble. However, due to different consensus algorithms, they do not have the same security level as the Ethereum main chain.

OK, with this settled let’s now look at and compare Optimism, Arbitrum, and Polygon in detail.

What is Optimism?

Optimism is a layer 2 scaling protocol that utilizes optimistic rollups. It is built with the aim to provide instant transactions and low transaction fees while sharing the secure and decentralized characteristics of the main Ethereum blockchain. Its design philosophy is based on four pillars: 

1. Simplicity

2. Pragmatism

3. Sustainability

4. Optimism

Optimism has its own governance token $OP, which is an ERC-20 token. A large portion of $OP token was given to early adopters and active participants through airdrops.

What are the pros and cons of Optimism?

Pros:

• Because the transaction data is still stored on the main Ethereum chain, Optimism has the same level of transparency, security, and decentralization as Ethereum.

• Fraud-proof computation can be done by regular layer 2 nodes and does not need special hardware.

• It is easy to move dApps and smart contracts from Ethereum to Optimism due to its compatibility with EVM.

Cons:

• Transaction finality is delayed for 7 days due to potential fraud challenges. Because of this, when withdrawing crypto users must wait for a week until they receive their assets.

• Transaction ordering could be influenced by rollup operators.

• Costs of transactions are higher than on sidechains because all transaction data must be posted on-chain.

What is Arbitrum?

Arbitrum has two main public permissionless chains that are both layer 2 running on Ethereum:

• Arbitrum One: is an Optimistic Rollup chain. It was then upgraded to use the Nitro tech stack to maintain the same state while lowering fees, having better Ethereum compatibility, and making the code simpler.

• Arbitrum Nova: is also built with Nitro and is specially developed for dApps (decentralized applications) such as gaming, social, and Non-Fungible Token (NFT) projects which come with high transaction volumes and demand very low transaction fees. This is achieved using the AnyTrust model which is not an Optimistic Rollup protocol. In exchange for lower fees, its data availability is managed by a fixed permissioned set of entities called “Data Availability Committee (DAC)”.

Users can switch between Arbitrum One and Nova using the Arbitrum bridge. Arbitrum’s governance token $ARB is an ERC-20 token. It has been recently distributed to community members via airdrop.

What are the pros and cons of Arbitrum?

Since Arbitrum One is an optimistic rollup chain, it shares the same pros and cons with Optimism. However, with Arbitrum Nitro, the execution environment is closer to EVM and code can be compiled to WASM.

Arbitrum Nova is built with Nitro and AnyTrust. The main advantage brought by AnyTrust is significantly lower fees. However, Arbitrum Nova is not permissionless and is also not as decentralized as Ethereum when it comes to data availability management. Furthermore, the sequencer, which submits the user’s transactions to the layer 1 chain, has the privilege to order transactions.

What Is Polygon?

The Polygon network includes 2 Ethereum off-chain scaling solutions:

Polygon PoS: is a combination of Proof-of-Stake and Plasma-enabled sidechains. The network’s architecture comprises 3 layers:

• Layer 1: a group of smart contracts on the Ethereum main chain.

• Layer 2: is called the Heimdall layer which is the PoS layer.

• Layer 3: is called the Bor layer which produces sidechain blocks and is based on Geth.

The native cryptocurrency used on Polygon PoS is $MATIC.

Polygon zkEVM: currently in the mainnet Beta phase, it is a layer 2 scaling solution for Ethereum using ZK-Rollups. It is scalable, equivalent to the EVM, and shares the security and decentralization of Ethereum.

What are the pros and cons of Polygon?

The pros and cons of Polygon PoS are reflected in the pros and cons of sidechains:

Pros:

• The technology used for sidechains is mature due to existing extensive research.

• The transaction finality is much faster than optimistic rollups because there is no fraud proof challenge period. As a result, users can withdraw their crypto assets almost instantly.

• EVM compatibility allows easy expansion of dApps’ ecosystem.

Cons:

• Sidechains do not share Ethereum’s security and decentralization as optimistic rollups do.

• Higher trust assumptions are needed for sidechains.

The pros and cons of Polygon zkEVM are reflected in the pros and cons of ZK-rollups:

Pros:

• Reliance on cryptographic algorithms on security instead of the honesty of rollup validators.

• Transaction finality is faster and users experience no withdrawal delays.

• Data that is needed to recover the off-chain state is stored on the Ethereum main chain, which ensures decentralization, censorship resistance, and security.

Cons:

• Special hardware is needed for validity-proof computation, which could reduce decentralization.

• The ordering of transactions can be influenced by sequencers.

• Compared with optimistic rollups, the cost of computation and verification of validity proofs is higher and the technology is more complex.

📚 Read! Blockchain bridges allow a user to send crypto between networks