> ## Documentation Index
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# Arbitrum: Scalable, private smart contracts

> This paper presents Arbitrum, an optimistic rollup system designed to significantly enhance the scalability and privacy of smart contracts on existing blockchai

# Arbitrum: Scalable, private smart contracts

This paper presents Arbitrum, an optimistic rollup system designed to significantly enhance the scalability and privacy of smart contracts on existing blockchai

## Abstract

This paper presents Arbitrum, an optimistic rollup system designed to significantly enhance the scalability and privacy of smart contracts on existing blockchain platforms, particularly Ethereum. Arbitrum operates by executing smart contract computations off-chain on an Arbitrum Virtual Machine (AVM), drastically reducing the load on the main chain. Security is maintained through a fraud proof mechanism: any participant can challenge the correctness of an off-chain computation, triggering a dispute resolution process on the main chain where the disputed computation is re-executed. This 'optimistic' approach assumes transactions are valid unless proven otherwise, allowing for high throughput and reduced transaction costs. The protocol also offers privacy for the state of contracts and transaction data within an Arbitrum chain, only revealing it if a dispute arises. Arbitrum represents a foundational contribution to Layer 2 scaling solutions, demonstrating a robust and practical method to scale smart contract execution while inheriting the security of the underlying Layer 1 blockchain.

**Authors:** Harry Kalodner, Steven Goldfeder, Xiaoqi Chen, S. Matthew Weinberg, Edward W. Felten

**Publication:** Academic Paper

**Publication date:** 2018-01-01

## Key findings

* Arbitrum introduces an optimistic rollup system for scaling smart contracts off-chain.
* Computations are performed on an Arbitrum Virtual Machine (AVM), with results posted to the main chain.
* Security relies on fraud proofs, allowing anyone to challenge incorrect off-chain computations.
* This method significantly increases throughput and reduces transaction costs compared to Layer 1.
* It provides privacy for contract state and transaction data until a dispute necessitates disclosure.

## Citation

Harry Kalodner, Steven Goldfeder, Xiaoqi Chen, S. Matthew Weinberg, Edward W. Felten (2018). Arbitrum: Scalable, private smart contracts. Academic Paper. [https://www.usenix.org/system/files/conference/usenixsecurity18/sec18-kalodner.pdf](https://www.usenix.org/system/files/conference/usenixsecurity18/sec18-kalodner.pdf)

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***

**Canonical knowledge ID:** `research:arbitrum-scalable-private-smart-contracts`