Steven Goldfeder indicates Arbitrum will maintain its current design approach rather than adopting emerging rollup technologies, citing efficiency concerns.
<u>What to Know:</u>
- Arbitrum co-founder Steven Goldfeder expresses skepticism about transitioning to based or native rollups despite earlier reports
- Arbitrum remains the leading Ethereum Layer-2 scaling solution while facing increasing competition from Base, Optimism, and others
- The platform emphasizes security and decentralization with its DAO controlling billions in assets through self-executing governance
In a recent interview, Arbitrum co-founder and Offchain Labs CEO Steven Goldfeder expressed reluctance to embrace based or native rollups, contradicting earlier reports that suggested the company was moving in that direction. Goldfeder believes Arbitrum's current design is "more efficient, practical, and cost-effective" than based rollup alternatives, signaling a strategic divergence from emerging industry trends.
"Just to clarify the terms, you know, a based rollup is basically a rollup without a sequencer that uses Ethereum for sequencing," Goldfeder explained. "Actually, if you look at that initial Arbitrum paper that we wrote in 2018, you might call it a based rollup. It doesn't have a sequencer; that only came later."
While acknowledging the potential of native execution technology, Goldfeder offered no commitment to implement it. "I support Vitalik's view of native rollups, which envisions a common core that we factor out that will be useful by many rollups, but also provides for rollups to extend that with additional features," he stated in a follow-up clarification after the interview. He emphasized that continued innovation at the execution layer remains crucial, but was clear in his assessment: "I don't think Arbitrum will become a based rollup anytime soon, and I don't think that it should when it comes to native execution."
From Academic Research to Leading L2 Solution
Goldfeder's journey into crypto began at Princeton in 2013, where Professor Ed Felten—who later became Arbitrum co-founder and White House science advisor—delivered a lightning talk about Bitcoin.
That same evening, Goldfeder participated in a poker game with a half-BTC buy-in, worth about ten dollars at the time. "If only I'd held onto it," he reflected.
By 2018, Goldfeder had co-founded Offchain Labs with Felten, developing Arbitrum from a Princeton research project. The name "Arbitrum" derives from arbitration, reflecting its design philosophy. "The idea is we take as much computation off Ethereum as possible while having Ethereum to be the sort of referee. If something goes wrong, Ethereum can, you know, fix things," Goldfeder explained.
This approach aligned with Ethereum's core principles of decentralization and resilience, helping Arbitrum establish itself as the leading Ethereum L2 scaling solution. The platform was designed to address Ethereum's key challenges: high gas fees, slow transaction speeds, and scalability limitations. Arbitrum offers full EVM compatibility, allowing developers to port Ethereum smart contracts without modifications.
Arbitrum's competitive advantage, according to Goldfeder, stems from its commitment to decentralization and security. "Arbitrum is like the original layer, the earliest optimistic rollup, the first general purpose layer 2 to launch. And the things that we take very seriously and are paramount to us is that we always put security and decentralization and (values like) censorship resistance over growth."
The platform was the first general-purpose rollup to achieve Stage 1 decentralization, where chain state is verified with fault proofs while maintaining an override mechanism requiring consensus from operators and external stakeholders. Stage 2, representing full decentralization with network management by smart contracts and permissionless validation, remains a future goal.
Competing in the Crowded L2 Landscape
Despite its leadership position, Arbitrum faces intensifying competition from rivals like Optimism, Base, ZKsync, and StarkNet. Each competitor brings unique advantages, from Optimism's growing ecosystem to Base's aggressive scaling and the cryptographic certainty offered by zero-knowledge proof systems.
The L2 race has grown more complex with the emergence of faster rollups like MegaETH, which sacrifices some decentralization for speed and can reportedly process 20,000 transactions per second on testnet. These developments put pressure on Arbitrum to continue innovating while maintaining its commitment to security and decentralization.
Goldfeder emphasized that Arbitrum's governance model distinguishes it from many competitors. "The Arbitrum DOA is directly controlled by the tokenholders onchain. And by the way, for the fees for the network, those don't come to me. Those don't come to some centralized foundation wallet. Those go directly to the onchain treasury," he stated.
This governance structure faced scrutiny last month when a proposal from Arbitrum DAO's growth management committee recommended deploying 7,500 ETH to non-native protocols—Lido, Aave, and Fluid—sparking community backlash.
Despite this controversy, Goldfeder maintains that Arbitrum DAO represents true decentralized governance with self-executing token holder control over billions in assets, protocol upgrades, and fee distribution.
Arbitrum's Gaming Catalyst Program, a $200-million initiative to boost Web3 gaming, exemplifies this approach. Unlike traditional venture capital funds where profits benefit insiders, GCP's sole limited partner is the Arbitrum community itself, with voting controlled by the DAO. Successful investments directly benefit tokenholders, reinforcing community ownership.
Beyond scaling solutions, Offchain Labs contributes directly to Ethereum's core development. "We built Prysm, Ethereum's leading consensus client," Goldfeder noted. His team has been involved in major Ethereum upgrades, including the shift to proof-of-stake and upcoming blob transactions.
Arbitrum Orbit represents another strategic initiative, offering a framework for developers to create customized chains. With over 100 orbit chains in development, Arbitrum aims to become "the AWS of Web3," providing tailored blockchain solutions for various enterprises and organizations.
The Road Ahead for Ethereum Scaling
As Ethereum continues to evolve, Arbitrum's role in the ecosystem remains significant despite Goldfeder's skepticism about based and native rollups. By focusing on cost reduction, performance improvement, and decentralized governance, Arbitrum works to bridge the gap between Ethereum's ideals and practical usability.
"Unlike some other scaling methods, Arbitrum remains closely integrated with Ethereum's decentralized framework," Goldfeder concluded. Whether this integration strategy will prevail against competing approaches remains uncertain, but twelve years after that fateful poker game with Bitcoin in 2013, Goldfeder and Arbitrum continue to play a crucial role in Ethereum's scaling story.
Conclusion
Steven Goldfeder's stance against adopting based and native rollups highlights Arbitrum's commitment to its established design principles despite industry evolution. While competition intensifies in the L2 space, Arbitrum maintains its focus on security, decentralization, and Ethereum integration, positioning itself as a conservative but reliable scaling solution in a rapidly changing landscape.