Bessie Liu

The Arbitrum ARB governance token airdrop is one day away and will mark the beginning of its transition into decentralization.



Prior to its token launch, the Ethereum layer-2 network had been governed by New York startup <a href="https://blockworks.co/tag/offchain-labs" target="_blank" rel="noreferrer noopener">Offchain Labs</a> — the developer behind the protocol. 



Arbitrum is an <a href="https://ethereum.org/en/developers/docs/scaling/optimistic-rollups/" target="_blank" rel="noreferrer noopener">optimistic</a> rollup scaling solution on Ethereum. Scaling solutions are designed to ease congestion and prices of gas fees on the Ethereum network.



Rather than executing a transaction on Ethereum, the transaction is instead sent to Arbitrum, whose throughput capacity is seven to <a href="https://blockworks.co/news/arbitrum-optimism-exceed-ethereum">10 times greater than that of Ethereum</a>.&nbsp;



Following Arbitrum’s <a href="https://blockworks.co/news/arbitrum-upgrades-to-nitro-ahead-of-ethereum-merge">Nitro upgrade</a>, there has been an <a href="https://dune.com/blockworks_research/l2-comparison-dashboard" target="_blank" rel="noreferrer noopener">uptick</a> in transactions on-chain, recently <a href="https://dune.com/queries/1873519/3083010" target="_blank" rel="noreferrer noopener">overtaking Ethereum</a> in daily transactions.



There’s currently $2 billion locked inside Arbitrum-powered protocols compared to Optimism’s $1 billion, per <a href="https://defillama.com/chain/Arbitrum" target="_blank" rel="noreferrer noopener">DeFiLlama</a>. Decentralized derivatives platform GMX and exchange Uniswap command the most value. Ethereum native dapps Aave and Curve have also launched on the network, among others. 



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1600" height="760" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/unnamed-1.png?w=1024&amp;h=1024" alt="" class="wp-image-49814" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/unnamed-1.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/unnamed-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/unnamed-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/unnamed-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/unnamed-1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/unnamed-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/unnamed-1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/unnamed-1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/unnamed-1.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /></figure>



Rising usage only amplifies the need for decentralization. According to <a href="https://www.blockworksresearch.com/" target="_blank" rel="noreferrer noopener">Blockworks Research</a>, ARB will allow for decentralized governance over the Arbitrum protocol, similar to Optimism’s OP token. 



ARB holders will vote on all aspects of the protocol including upgrades, inflation adjustments, as well as capital allocations (including grants).&nbsp;



Almost 12% of the total airdrop supply will be distributed to Arbitrum users and a tad over 1% of will be given to <a href="https://docs.google.com/spreadsheets/d/e/2PACX-1vSSAzkIIJqw4WGKCF9gXFUkQojTt6weQTExZYmp3YRIR2TUjir9N8nh8xg7gQ2wuPA8mJKL2neL--to/pubhtml#" target="_blank" rel="noreferrer noopener">DAOs</a> building on top of the network.



<ul>
<li>43% to the Arbitrum DAO treasury overseen by the protocol’s community governance.&nbsp;</li>



<li>27% to the Offchain Labs team and future advisers.</li>



<li>17.5% to Offchain Labs investors.</li>
</ul>



A security council will also be established to make swift decisions when a normal governance process may be too slow.&nbsp;



“The security council, while removing some element of decentralization, is meant as a backstop in case of emergencies,” Blockworks Research said. “Since Arbitrum, and rollups in general, are still in their infancy it&#8217;s not enough to say they are truly 100% secure especially as new upgrades get added.”



Token holders will elect two groups of six security council members (totaling 12) every six months, each who will have private keys to a multsig that will control the protocol’s primary smart contract.



An eligible candidate for the council must be a member of the DAO and receive support from 0.2% of votable tokens. Chosen members will receive a $5,000 stipend in the form of ARB tokens.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1600" height="819" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-6.png?w=1024&amp;h=1024" alt="" class="wp-image-49810" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-6.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-6.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-6.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-6.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-6.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-6.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-6.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-6.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-6.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /></figure>



<h2>How much trust is baked into Arbitrum?</h2>



Main trust <a href="https://l2beat.com/scaling/projects/arbitrum" target="_blank" rel="noreferrer noopener">concerns</a> around Arbitrum are in its state validation and upgradability. Arbitrum did not respond to Blockworks’ request for comment.



State validation refers to the proofs used or how the network decides which transactions (network state) are valid.



“In Arbitrum&#8217;s case, they have fraud proofs enabled, but only by whitelisted validators and used interactive proofs which take many transactions to solve,” Blockworks Research said.



Although enabling fraud proofs is much better than having none at all — as in the case of Arbitrum’s competitor Optimism — it would be more ideal to have permissionless proofs. 



Another risk is the upgradability of Arbiturm’s smart contract, as seen with Jump Crypto’s <a href="https://blockworks.co/news/jump-crypto-wormhole-hack-recovery">counter-exploit of the Wormhole hacker</a> last month. A smart contract is considered to be most secure if it can not be upgraded, which is not the case for both Arbitrum and Optimism.



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Arbitrum Airdrop: What You Need To Know About This Ethereum Layer-2

<div id="highlights-block_63472370b561b" class="highlights">
 <ul>
 <li>The financial terms of the acquisition have not been disclosed</li>
 <li>Scaling will be a primary focus for the team moving forward</li>
 </ul>
 
</div>



Ethereum smart contract scaling solution developer Offchain Labs has acquired Prysmatic Labs, a core force behind the architecture of <a href="https://cms.blockworks.co/ethereum-switches-to-proof-of-stake-after-7-years-of-work/" target="_blank" rel="noreferrer noopener">the Merge</a>.



Offchain Labs — the leading Ethereum consensus client now powering the blockchain’s proof-of-stake validation system — is also behind Arbitrum One, a market-leading layer-2 secure scaling solution for decentralized application development on Ethereum. The company was co-founded by Princeton professor Ed Felten and Ph.D. students Steven Goldfeder and Harry Kalodner.



Goldfeder told Blockworks acquisition talks began about a year ago but only gathered steam in recent months. The purchase would bring the Offchain Labs team to roughly 60 employees.



“From a values perspective but also from our fascination with the technical problems here and our desire to solve these problems, it just felt like a very natural decision,” Goldfeder said. “We’re just increasing our capacity by joining forces.”



The companies declined to comment on the terms.



<h3>Joining forces to scale Ethereum</h3>



Last month, Ethereum founder Vitalik Buterin said post-Merge, the top priority of the second largest cryptocurrency would be to <a href="https://cms.blockworks.co/whats-next-for-ethereum-in-a-post-merge-world/" target="_blank" rel="noreferrer noopener">improve its ability to scale</a>.&nbsp;



This next step in the Ethereum roadmap is dubbed “the Surge” — a series of events intended to eventually speed up the blockchain while making transactions more affordable.



“Our goal is to deliver scale to users — which means a large volume of transactions at a low cost — we want to continue to increase the volume of transactions at that low price point while doing so securely,” Goldfeder said.



Arbitrum is Ethereum’s leading roll-up solution with a total value locked (TVL) of <a href="https://defillama.com/chain/Arbitrum" target="_blank" rel="noreferrer noopener">$965.5 million</a>. Its acquisition of Prysmatic Labs, the developer of Prysm — the most <a href="https://clientdiversity.org/" target="_blank" rel="noreferrer noopener">widely used</a> software to run Ethereum&#8217;s consensus — is said to allow for better communication between teams developing Ethereum’s layer-1 consensus and data availability technology, as well as layer-2 execution and scalability mechanisms.



There is, however, a slight conflict of interest. Prysmatic Labs will need to ensure no layer-2 applications are getting special treatment as it continues to grow Ethereum, even if the layer-2 will be bearing the bulk of its expenses. Aware of potential issues, Goldfeder said both parties are “committed to continuing to develop Prysm as a neutral client.”



“A lot of it comes down to the commitment to the values of developing Ethereum — serious values that we share as an open and decentralized platform that favors the ecosystem at large,” he said. “A lot of ethics also comes down to the integrity of the people — and the Prysm team have shown themselves over the past few years — from the top leadership down the line, to be people with high integrity.”



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Offchain Labs Acquires Ethereum Consensus Client Prysmatic Labs

Ben Strack

<div id="highlights-block_62ffae8d558d3" class="highlights">
 <ul>
 <li>A former Bakkt and Coinbase executive leaves for alternative asset manager</li>
 <li>Ex-Bank of America electronic foreign exchange sales head joins B2C2</li>
 </ul>
 
</div>



Yuga Labs named <a href="https://www.linkedin.com/in/chris-r-fortier/" target="_blank" rel="noreferrer noopener">Chris Fortier</a> its new vice president of product and will support the team broadly across Web3, metaverse, NFT and product initiatives. 



Fortier previously worked at <a href="https://rally.io/" target="_blank" rel="noreferrer noopener">Rally.io</a> where he oversaw its social token and NFT (non-fungible token) capabilities while also leading its strategic direction and user experience. Fortier also led the development of creator-centric products for Twitch.



“In my new role I’ll be helping build the next wave of digital experiences — not just for our Apes, Punks, Meebits, Voyagers, and Mutants, but for the entire web3 industry, which is an incredible opportunity,” Fortier said in a statement.



The Fortier appointment comes about a week after Yuga Labs hired <a href="https://www.linkedin.com/in/dannygreene82/" target="_blank" rel="noreferrer noopener">Danny Greene</a> to fill its newly created role of brand lead for <a href="https://meebits.app/" target="_blank" rel="noreferrer noopener">Meebits</a> after Greene spent the last eight months as general manager of the MeebitsDAO.



Offchain Labs hired Andrew Saunders as its first chief marketing officer as the company seeks to expand its reach with Ethereum scaling solutions.



Saunders joins from Amazon&#8217;s global brand marketing team, where he helped build its first entertainment and culture marketing practice. Before that, he was global head of brand strategy and marketing for media company Tastemade.



Offchain Labs is developing Arbitrum, a so-called optimistic rollup scaling solution for Ethereum. The hire comes after the company launched Arbitrum Nova, a blockchain for games and social applications development.&nbsp;



“Arbitrum has become a premier destination for Web3 builders around the world and we&#8217;re looking forward to bringing Andrew into the fold to expand on that global reach and rapid adoption to date,&#8221; Offchain Labs CEO Steven Goldfeder said in a statement.



<a href="https://www.linkedin.com/in/marcboiron/" target="_blank" rel="noreferrer noopener">Marc Boiron</a>, the former chief legal officer at dYdX, has left the company to take the same role with Ethereum scaling platforms developer Polygon. 



In addition to his experience at dYdX, Boiron worked at law firm Manatt, Phelps &amp; Phillips, where he advised companies on blockchain technology-related issues and developing approaches to addressing regulatory issues adopted across the Web3 ecosystem.&nbsp;



“With regulatory pressure increasing worldwide, it’s integral to have an in-house legal counsel to help navigate and embrace web3’s ever-evolving regulatory landscape,” Polygon co-founder Sandeep Nailwal said in a statement.



UK-based crypto firm B2C2 lured <a href="https://www.linkedin.com/in/zeke-vince-a458a64/" target="_blank" rel="noreferrer noopener">Zeke Vince</a> from the traditional finance world to lead its US sales efforts.  



Vince was formerly the global head of electronic foreign exchange sales at Bank of America Securities. He joined Bank of America in 2017 from JPMorgan, where he spent six years as a part of the electronic foreign exchange sales team. Prior to JPMorgan, Zeke worked in the same unit at Credit Suisse.



Crypto exchange Unizen appointed Michael Healy, a co-founder of the <a href="https://www.unit.network/home" target="_blank" rel="noreferrer noopener">Unit Network</a>, as chief strategy officer. 



Healy worked for Wikileaks and helped build its Android application in 2010. After donations via Visa and Mastercard were disabled, he brought bitcoin payments to the organization.



He has also previously worked at London-based venture capital firm Wellington Partners, investing in companies such as Spotify during his tenure.&nbsp;



The hire comes after Unizen received $200 million from Global Emerging Markets in June to accelerate the development of its trade aggregation system.



Alternative asset manager Blackstone hired <a href="https://www.linkedin.com/in/adamlwhite/" target="_blank" rel="noreferrer noopener">Adam White</a>, a former Bakkt and Coinbase executive, as a senior adviser.



He will focus on advising within the company’s growth equity investing platform as Blackstone seeks to invest in services and infrastructure supporting the digital asset ecosystem. Blackstone participated in <a href="https://www.prnewswire.com/news-releases/chainalysis-raises-100-million-at-a-4-2-billion-valuation-to-execute-vision-as-the-blockchain-data-platform-301319274.html" target="_blank" rel="noreferrer noopener">a $100 million funding round</a> last year for Chainalysis, which provides blockchain data and compliance software.



White joins Blackstone after working as president and chief operating officer at Bakkt since 2018. Before that, he was a vice president and general manager at Coinbase.



Crypto.com named <a href="https://www.linkedin.com/in/chintahang/" target="_blank" rel="noreferrer noopener">Chin Tah Ang</a> as general manager for Singapore after the company received in-principle approval from the Monetary Authority of Singapore for its Major Payment Institution License. 



Ang most recently served as the executive director of Digital Industry Singapore. Before that, he worked for the Singapore Economic Development Board.



The hire comes after <a href="https://decrypt.co/107509/second-layoff-round-at-crypto-com-worse-than-june-cuts-sources" target="_blank" rel="noreferrer noopener">sources told Decrypt</a> that Crypto.com is set to lay off more employees after <a href="https://cms.blockworks.co/crypto-com-cutting-5-of-workforce-amid-digital-asset-downturn/" target="_blank" rel="noreferrer noopener">cutting 260 staff members in June</a>. 



A spokesperson for the company declined to comment.



Meanwhile, crypto social trading network BingX revealed Friday that it is looking to fill about 200 positions globally, including public relations managers, as well as product development and customer service professionals.&nbsp;



“This so-called crypto winter presents a rare chance for us to tap on some of the industry&#8217;s best talents and we will leverage on that,” BingX Communications Director Elvisco Carrington said in a statement.&nbsp;



<h3>In case you missed it</h3>



Singapore-based cryptocurrency lender Hodlnaut decided to slash its headcount by 80%, or about 40 employees. The retained team is required to carry out key functions, it said.



The firm said in an <a href="https://www.hodlnaut.com/press/an-update-on-our-ijm-process" target="_blank" rel="noreferrer noopener">update</a> on Friday that it is handling inquiries from the Singapore attorney general and the police force but did not offer further details.



Crypto broker <a href="https://cms.blockworks.co/leadership-reshuffle-at-genesis-includes-ceo-michael-moro/" target="_blank" rel="noreferrer noopener">Genesis named a swath of new leaders</a> as CEO Michael Moro is set to step down. The Digital Currency Group subsidiary appointed Chief Operating Officer Derar Islim, who joined Genesis in 2020, to be its interim CEO while the company searches for a full-time chief executive. 



The crypto brokerage also <a href="https://www.bloomberg.com/news/articles/2022-08-17/genesis-ceo-steps-down-as-crypto-broker-slashes-its-workforce?srnd=premium#xj4y7vzkg" target="_blank" rel="noreferrer noopener">revealed to Bloomberg</a> that it is cutting 20% of its 260-person workforce.



<a href="https://cms.blockworks.co/citi-nabs-crypto-leaders-for-treasury-and-trade-solutions-unit/" target="_blank" rel="noreferrer noopener">Citi added two crypto-focused leaders</a> to its Treasury and Trade Solutions unit. 



<a href="https://www.linkedin.com/in/ryanrugg/" target="_blank" rel="noreferrer noopener">Ryan Rugg</a>, who has experience at Lehman Brothers, Morgan Stanley, JPMorgan and IBM, joined as the division’s global head of digital assets. <a href="https://www.linkedin.com/in/davidcunninghamireland/details/experience/" target="_blank" rel="noreferrer noopener">David Cunningham</a>, previously the chief commercial officer at LexTego, is now Citi’s director of strategic partnerships for digital assets. 



21Shares hired <a href="https://www.linkedin.com/in/sherif-el-haddad-94a02647/" target="_blank" rel="noreferrer noopener">Sherif El-Haddad</a>, previously the head of asset management at Al Mal Capital, to lead <a href="https://cms.blockworks.co/21shares-adds-execs-as-part-of-global-expansion/" target="_blank" rel="noreferrer noopener">the firm’s expansion in the Middle East</a>. 



The world’s largest crypto exchange-traded product (ETP) issuer also revealed Wednesday that former Barclays executive <a href="https://www.linkedin.com/in/marina-baud%C3%A9an/" target="_blank" rel="noreferrer noopener">Marina Baudéan</a> joined the company as its head of France, Belgium and Luxembourg. Additionally, <a href="https://www.linkedin.com/in/oliver-sch%C3%A4fer-33235775/?originalSubdomain=de" target="_blank" rel="noreferrer noopener">Oliver Schäfer</a>, who previously worked at JPMorgan Asset Management for 15 years, is the company’s new head of Germany.



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Latest in Crypto Hiring: Yuga Labs, Offchain Labs Add Execs

Morgan Chittum

<div id="highlights-block_612e5b56905f8" class="highlights">
 <ul>
 <li>OffChain Labs, a developer for Ethereum scaling solutions, opened its mainnet Arbitrum One to the public on Tuesday</li>
 <li>Stock brokerage platform Alpaca announced plans to offer crypto trading for customers in the future</li>
 </ul>
 
</div>



Alpaca and Offchain Labs secured a combined $170 million in Series B funding, signaling a growing appetite in investor interest for digital asset-based startups.



<a href="https://offchainlabs.com">Offchain Labs</a>, an Ethereum scaling solutions developer, raised $120 million in a Series B funding round, the company <a href="https://www.salamancapress.com/news/state/offchain-labs-rolls-out-arbitrum-one-ethereum-scaling-solution-to-the-public-and-announces-120m/article_e73ff0a1-85b4-56be-923b-ad15aa6b8ccb.html">announced</a> Tuesday.&nbsp;



Alongside the funding news, Offchain rolled out its mainnet, referred to as Arbitrum One, to the public. Arbitrum, the technology behind the new product, scales apps to reduce costs and increase capacity. The company will use the funding to expand staff and further develop Arbitrum One through scaling solutions and R&amp;D investments.



Led by Lightspeed Venture Partners, other participants in the round include Alameda Research, Pantera Capital, Polychain Capital, Ribbit Capital, Redpoint Ventures, Mark Cuban and others. Lightspeed’s Ravi Mhatre has joined the company&#8217;s board with the fundraising round.



&#8220;We are excited to partner with our investors who understand the importance of scaling Ethereum and bringing the Ethereum ecosystem to the masses,&#8221; said Steven Goldfeder, co-founder and CEO, of Offchain Labs. &#8220;The tremendous support we&#8217;ve seen from developers across the globe validates our mission to be the first to marry the world of FinTech and Defi.&#8221;



Offchain is now valued at $1.2 billion after the Princeton-founded company raised $20 million in Series A funding in April then later closed their Series B round this month.



<h3>Alpaca expands into crypto</h3>



Elsewhere, stock brokerage platform <a href="https://alpaca.markets/" target="_blank" rel="noreferrer noopener">Alpaca</a> announced plans to offer crypto trading to customers, the company <a href="https://alpaca.markets/blog/alpaca-raises-50-million-series-b-announces-crypto/" target="_blank" rel="noreferrer noopener">announced</a> on Monday. In addition, Alpaca scored $50 million in a Series B funding round, led by Tribe Capital.



“Our modern financial system runs on antiquated rails. Alpaca has established itself as the go-to developer-first API for investing by providing an easier, cleaner, and more scalable alternative to what exists today,” said Arjun Sethi, Co-Founder and Partner at Tribe Capital. “Its crypto launch is just the first of many product iterations that will allow global investors to access U.S. markets.”



Alpaca, which currently offers an application programming interface (API) for fintech apps to trade US stocks, said their new crypto product will allow customers to buy, sell, and trade their digital assets through their developer-first APIs. The soon-to-be product will be available to both B2B partners and retail investors.&nbsp;



Other participants in the Series B round include <a href="https://www.eldridge.com/" target="_blank" rel="noreferrer noopener">Eldridge</a>, <a href="https://horizonsventures.com/" target="_blank" rel="noreferrer noopener">Horizons Ventures</a>, <a href="https://www.positivesumvc.com/" target="_blank" rel="noreferrer noopener">Positive Sum</a>, <a href="https://portagevc.com/" target="_blank" rel="noreferrer noopener">Portage Ventures</a>, <a href="https://www.sparkcapital.com/" target="_blank" rel="noreferrer noopener">Spark Capital</a>, and <a href="https://www.socialleverage.com/" target="_blank" rel="noreferrer noopener">Social Leverage</a>. Prior to their most recent fundraising, Alpaca raised $10 million in Series A capital and $6 million in seed funding.



Offchain Labs and Alpaca did not immediately return Blockworks&#8217; request for comment.&nbsp;



<h3>Continued investments in crypto</h3>



Money continues to pour into the digital asset space with venture funding reporting at all-time highs, Blockworks <a href="https://cms.blockworks.co/crypto-venture-funding-is-at-an-all-time-high-this-is-where-the-money-is-going/" target="_blank" rel="noreferrer noopener">reported</a>.



$17 billion has been invested into crypto projects this year as of mid-June, according to market data firm <a href="https://pitchbook.com/data" target="_blank" rel="noreferrer noopener">PitchBook</a>. The previous yearly record was $7.4 billion in 2018.



“We have many data points that show that institutional interest in this space is large and growing still, and venture funding is one really obvious one,” said Alex Thorn, head of firmwide research at Galaxy Digital in a previous <a href="https://cms.blockworks.co/crypto-venture-funding-is-at-an-all-time-high-this-is-where-the-money-is-going/" target="_blank" rel="noreferrer noopener">interview</a> with Blockworks. “We’ve seen enormous funds raised.”



Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.