Arbitrum Bets Big on Decentralization! Implements BoLD Protocol for Permissionless Validation

The Offchain Labs-founded Arbitrum, on 12 Feb, announced the launch of Bounded Liquidity Delay (BoLD) protocol for its Arbitrum ecosystem, the de-centralised Ethereum Layer-2 solution.

The operational launch on the Arbitrum One and Nova Chains comes as a major upgrade to the Arbitrum’s Layer 2 infrastructure which is Offchain Labs’ main Ethereum L2 network for DeFi, NFTs, and gaming. Designed with Ethereum Compatibility, Arbitrum enhances scalability by improving the speed and reducing the costs of transactions on the Ethereum blockchain. Using Optimistic Rollups, Arbitrum processes transactions in batches off-chain and then posts summaries to the Ethereum mainnet, reducing congestion on it.

The implementation of BoLD protocol on Arbitrum network, from Wednesday, replaces the earlier system of allowlisted by Off-chain Labs that allowed only a limited set of validators to participate in fraud-prood verification. Now BoLD will aim at making validation permissionless and more secure, allowing anyone to become a validator and contribute to Arbitrum’s security.

Today, BoLD delivers permissionless validation, making the Arbitrum ecosystem more secure and more decentralized than ever.

Anyone can defend Arbitrum.

Stage 2 soon. pic.twitter.com/y6y1WDTSwc

— Arbitrum (@arbitrum) February 12, 2025

Glancing at Arbitrum’s Complex Mechanism

The layer 2 solutions such as Arbitrum though significantly work towards reducing the cost of transactions on Ethereum but are prone to denial-of-service attacks with fraud-proof mechanisms.

For security and efficiency reasons, optimistic rollups used by Arbitrum require permissioned validators, posing delayed completion of transactions. Users have to wait for 7 days before transactions are finalized on Ethereum – the timeframe which can sometimes go beyond and indefinite. This makes inefficient use of capital as users have to wait before accessing their funds, making slower withdrawals. Furthermore, in case of fraudulent transactions, validators must possess financial incentives to report such instance as submitting fraud proofs comes with expensive computation. Certain censorship risks also remain as the centralized sequencer can anytime censor transactions without valid reasons.

Can BoLD make it simple?

The complexity and challenges of optimistic rollups utilised by notable Layer 2 scaling solutions such as Arbitrum itself, with other notables including Boba Network and Optimism, can be improvised with the launch of BoLD by Offchain. Granting permissionless validators, BoLD transforms the fraud-proof system by providing the time-bound dispute resolution mechanism.
In simple words, BoLD will enable the following:

•  Moving with permissionless validation, anyone can verify transactions and challenge fraud making the Arbitrum ecosystem more decentralized.
• The time-bound dispute resolution mechanism will aim to resolve any dispute within 12 days on Arbitrum chains – relieving validators of the challenging wait of long days.
•  To get rid of the fraudulent claims, BoLD requires validators and challenges to put a financial stake before submitting claims.
• With BoLD, a single honest validator will be able to successfully defend against any number of malicious actors, with challenges resolved in parallel rather than sequentially.
• It also introduces Censorship Timeout, implying, if an L2 sequencer is offline/censoring, the force inclusion window automatically reduces.
• It also creates a strong economic incentive against malicious behavior by confiscating the bonds from failed attackers and using them to reimburse honest validators.
• For making efficient use of validator resources, it uses multi-level refinement wheneever a dispute arises by procedding through – block level → big-step → one-step verification.
• For validators, running a BoLD validator requires no special hardware.

Thus, as Arbitrum looks forward to launching BoLD’s stage-2 as well in near future, the coming up of BoLD protocol moves Arbitrum and Layer 2 scaling solutions closure to the ultimate vision of Ethereum – transparency and Decentralisatiom.