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<p><strong>Steven Goldfeder, the CEO of Offchain Labs, has a crypto backstory that reads like pure tech legend.  It all began for him at Princeton back in 2013, during a campus visit day when he first caught wind of Bitcoin.</strong></p><p>The spark? A quick, captivating talk by Professor Ed Felten – who would later become a key figure in Ethereum rollups, a co-founder of Arbitrum, and even a science advisor to the White House. Felten posed a thought-provoking question: what would be the actual cost if a government tried to shut down Bitcoin?</p>

<p>For Goldfeder, curiosity struck instantly. That very evening, the crypto conversation continued around a poker table, where some students were hosting a game with a half-Bitcoin buy-in.  As he recounts:</p>

<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<p>“In those early days, half a Bitcoin was just ten bucks.  Oh, if only I'd held onto that!”</p>
</blockquote>

<p>Hindsight is 20/20, but Goldfeder probably isn't losing too much sleep over that missed opportunity now.  After all, Arbitrum has since become a major player in the crypto space.  It was specifically engineered to address some of Ethereum's pain points: hefty gas fees, slow transaction speeds, and scalability bottlenecks. Today, Arbitrum stands as a leading solution in the world of Ethereum Layer-2 scaling.<br/></p>

<figure class="wp-block-image aligncenter size-full"><img fetchpriority="high" decoding="async" width="645" height="337" alt="Steven Goldfeder " class="wp-image-41440 entered error"  data-lazy- src="https://s3.magazine.cointelegraph.com/magazine/wp-content/uploads/2025/03/Steven-supplied.jpg" data-ll-status="error" /><img fetchpriority="high" decoding="async" width="645" height="337" src="https://s3.magazine.cointelegraph.com/magazine/wp-content/uploads/2025/03/Steven-supplied.jpg" alt="Steven Goldfeder " class="wp-image-41440"  /><figcaption class="wp-element-caption"><em>Steven Goldfeder (Supplied)</em></figcaption></figure>

<p>However, rollups haven't escaped criticism.  Some argue they lean too heavily on revenue from centralized sequencers, and that the broader ecosystem suffers from a lack of seamless interoperability and composability.  Researchers at the Ethereum Foundation have suggested making rollups more “based” or "native" to tackle these very issues.</p><p>Despite signals from January’s sequencing discussions that Arbitrum might be leaning towards these solutions, Goldfeder seems to have reconsidered.</p>

<h2 class="wp-block-heading">Why Arbitrum is Steering Clear of Becoming a Based Rollup</h2>

<p>The idea behind based rollups is to leverage Ethereum’s own validators for sequencing. This could unlock better interoperability and composability among different Layer-2s. <span style="box-sizing: border-box; margin: 0px; padding: 0px;">Native rollups, on the other hand, would tap into Ethereum’s core network to replace existing fraud-proof systems. The goal? To make Layer-2s as robustly secure as Ethereum itself.</span></p><p>But Goldfeder's current stance reveals a growing skepticism regarding adopting this technology for Arbitrum. </p>

<p>“Just to make sure we're all on the same page with terminology, a based rollup essentially operates without a dedicated sequencer, relying on Ethereum for sequencing instead. Fun fact – if you actually look back at our original Arbitrum concept paper from 2018, you could almost consider it a based rollup in a way! It didn't initially have a sequencer; that was a later addition," he points out. </p>

<p>When it comes to native execution, Goldfeder echoes a sentiment shared by Vitalik Buterin: Ethereum's inherent strength lies in its diverse and varied approach.</p>

<p>“One of the things we're actively exploring is different execution models.  Arbitrum is fully EVM compatible, but we've also introduced Stylus. This cool feature lets you build smart contracts using languages beyond Solidity, like Rust, C, and C++,” he explains.</p>

<p>“After running this system in production for four years, across various testnet stages, I've come to believe that the design we've arrived at is actually the right path forward.”</p>

<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<p>“So, I don't foresee Arbitrum becoming a based rollup anytime soon, and frankly, I also don't think native execution is the direction it should take.”</p>
</blockquote>

<p>Seeking to solidify Arbitrum's position and gain further insights, Magazine followed up with Arbitrum after the initial interview.  Goldfeder clarified in a statement that he firmly believes Arbitrum’s current architecture is "more efficient, practical, and cost-effective" compared to based rollup designs.</p><p>He remained more cautious when discussing native rollup technology, stopping short of any commitment to implementation, yet expressing support for its underlying principles. </p><p>“I agree with Vitalik’s vision for native rollups – a shared foundation that many rollups can benefit from, but one that also allows for extensions and added features,” he said. “While some rollups might choose to stick solely to this core, it’s absolutely vital that we continue to encourage innovation and experimentation at the execution layer.”<br/></p>

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<h2 class="wp-block-heading">From Poker Chips to Protocols: The Genesis of Arbitrum</h2>

<p>Following his crypto awakening at Princeton in 2013, Goldfeder's academic interests pulled him towards cryptography and multiparty computation, ultimately placing him squarely in the exciting realm of blockchain security research.</p>

<p>By 2018, he teamed up with Professor Felten to co-found Offchain Labs, giving new life to a previously explored Princeton research project.  The outcome? Arbitrum – a rollup solution that, surprisingly, predates even Ethereum's own launch.</p>

<p>Unlike many crypto project names that sounds straight out of a B-grade sci-fi flick, Arbitrum actually has a clear and logical origin.  “It’s derived from ‘arbitration’,” Goldfeder clarifies.  “The core idea is to offload as much computational work as possible away from Ethereum, while still letting Ethereum act as the ultimate referee. If things go sideways, Ethereum steps in to set things right.”</p>

<p>This philosophy resonates perfectly with Ethereum's own ethos: decentralized, permissionless, and resilient.</p>

<figure class="wp-block-image aligncenter size-large is-resized"><img decoding="async" width="1024" height="714" alt="GDC" class="wp-image-41437" style="width:682px;height:auto"  data-lazy- src="https://s3.magazine.cointelegraph.com/magazine/wp-content/uploads/2025/03/GDC-2-1024x714.jpg"/><img decoding="async" width="1024" height="714" src="https://s3.magazine.cointelegraph.com/magazine/wp-content/uploads/2025/03/GDC-2-1024x714.jpg" alt="GDC" class="wp-image-41437" style="width:682px;height:auto"  /><figcaption class="wp-element-caption"><em>Arbitrum at GDC (<a href="https://x.com/arbitrum/status/1902468293333545192" target="_blank" rel="nofollow">Arbitrum</a>)</em></figcaption></figure>

<h2 class="wp-block-heading">Arbitrum's Play in the Ethereum Layer-2 Race</h2>

<p>The Layer-2 landscape is getting crowded, with major contenders like Optimism, ZKsync, and StarkNet all vying for the top spot. While Arbitrum has held the lead for a while, Coinbase's L2, Base, is closing in fast. Plus, there's the rise of faster rollups, like MegaETH (already hitting 20,000 TPS on testnet!), which sacrifice some decentralization for speed and might lure away certain users.</p>

<p>Goldfeder highlights Arbitrum's complete EVM compatibility.  This means developers can seamlessly move their existing Ethereum smart contracts over to Arbitrum without any code changes. No need for new languages or complicated integrations – it's designed to be straightforward and "plug and play."</p>

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<p>Gas fees are also super competitive. Arbitrum drastically reduces Ethereum's notoriously high gas costs by processing transactions in batches, making DeFi, NFTs, and crypto gaming much more accessible to everyone.</p>

<p>But according to Goldfeder, Arbitrum's real strengths lie in its decentralization and security.  While some Layer-2 solutions have centralized points of control, Arbitrum proudly holds the distinction of being the first general-purpose rollup to reach Stage 1 decentralization.</p><p>This Stage 1 milestone signifies that the chain's state is verified using fault proofs, but it still maintains an override mechanism – requiring consensus from both operators and external stakeholders. This reduces reliance on operators alone, a level of decentralization Goldfeder claims many competitors haven't yet achieved. </p><p>Looking ahead to Stage 2, the ideal state of full decentralization where the network is entirely governed by smart contracts, eliminating human operators and enabling truly permissionless validation (meaning anyone can submit fraud proofs), is still on the horizon.</p>

<figure class="wp-block-image aligncenter size-large is-resized"><img decoding="async" width="1024" height="703" alt="GDC" class="wp-image-41438" style="width:720px;height:auto"  data-lazy- src="https://s3.magazine.cointelegraph.com/magazine/wp-content/uploads/2025/03/GDC-1024x703.jpg"/><img decoding="async" width="1024" height="703" src="https://s3.magazine.cointelegraph.com/magazine/wp-content/uploads/2025/03/GDC-1024x703.jpg" alt="GDC" class="wp-image-41438" style="width:720px;height:auto"  /><figcaption class="wp-element-caption"><em>Arbitrum logo at GDC (<a href="https://x.com/arbitrum/status/1902468293333545192" target="_blank" rel="nofollow">Arbitrum</a>)</em></figcaption></figure>

<h2 class="wp-block-heading">The Road Ahead: Challenges and Hurdles for Arbitrum</h2>

<p>Despite its successes, Arbitrum isn't immune to challenges. Goldfeder is keenly aware of the intense competition, with Optimism's ecosystem expanding rapidly, Base scaling aggressively, ZKsync offering cryptographic assurance, and StarkNet's zero-knowledge proofs also gaining momentum.</p>

<p>Improving security remains a key focus for Goldfeder.<br/></p>

<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<p>“Arbitrum is the original in many ways – the first optimistic rollup, the first general-purpose Layer-2 to go live.  For us, security, decentralization, and values like censorship resistance are paramount, always taking precedence over sheer growth."</p>
</blockquote>

<h2 class="wp-block-heading">Arbitrum DAO: Real Decentralized Control, According to Goldfeder</h2>

<p>In the crypto world, "decentralized governance" can sometimes feel like a show – a few insiders pulling the strings while token holders just watch. Goldfeder argues that Arbitrum is different.</p>

<p>He emphasizes that unlike many governance models that are merely advisory, with the foundation holding ultimate power, Arbitrum's governance is self-executing. Token holders have genuine control over billions in assets, manage protocol upgrades, and even decide how network fees are distributed.</p>

<p>“The Arbitrum DAO is directly in the hands of token holders, acting on-chain. And importantly, the network fees don’t come to me, or to some centralized foundation wallet. They flow directly into the on-chain treasury," he states.</p>

<figure class="wp-block-image aligncenter size-large is-resized"><img decoding="async" width="1024" height="559" alt="WSH" class="wp-image-41435" style="width:744px;height:auto"  data-lazy- src="https://s3.magazine.cointelegraph.com/magazine/wp-content/uploads/2025/03/Steven-podcast-1024x559.jpg"/><img decoding="async" width="1024" height="559" src="https://s3.magazine.cointelegraph.com/magazine/wp-content/uploads/2025/03/Steven-podcast-1024x559.jpg" alt="WSH" class="wp-image-41435" style="width:744px;height:auto"  /><figcaption class="wp-element-caption"><em>Steven on the </em>When Shift Happens<em> podcast. (<a href="https://x.com/KevinWSHPod/status/1903255472179744950" target="_blank" rel="nofollow">Mr Shift</a>)</em></figcaption></figure>

<p>While that might be the ideal, a recent proposal from the Arbitrum DAO's newly formed growth management committee did spark some debate last month. The recommendation? To allocate 7,500 ETH to Lido, Aave, and Fluid – prominent DeFi protocols, but notably not native to Arbitrum.</p>

<p>On the flip side, consider the Gaming Catalyst Program (GCP), a $200 million initiative focused on supercharging Web3 gaming.  Unlike typical VC funds where profits benefit insiders, the GCP's sole Limited Partner is the Arbitrum community itself, with investment decisions voted on by the DAO.  Essentially, every success directly benefits token holders, reinforcing a genuine ownership model.</p>

<figure class="wp-block-image alignright size-large is-resized"><img decoding="async" width="1024" height="940" alt="arb" class="wp-image-41436" style="width:384px;height:auto"  data-lazy- src="https://s3.magazine.cointelegraph.com/magazine/wp-content/uploads/2025/03/Builders-arb-1024x940.jpg"/><img decoding="async" width="1024" height="940" src="https://s3.magazine.cointelegraph.com/magazine/wp-content/uploads/2025/03/Builders-arb-1024x940.jpg" alt="arb" class="wp-image-41436" style="width:384px;height:auto"  /><figcaption class="wp-element-caption"><em>Building on Arbitrum meme (<a href="https://x.com/MattyTom01/status/1901426829577093508" target="_blank" rel="nofollow">Mathias Tom</a>)</em></figcaption></figure>

<p>Beyond just Layer-2 scaling, Offchain Labs is actively contributing to Ethereum's fundamental development. “We’re the team behind Prysm, Ethereum’s leading consensus client,” Goldfeder points out. “From the Merge, the move to proof-of-stake, to the upcoming blob transactions – our team is deeply involved as core developers, right at the heart of these crucial conversations.”</p>

<p>And then there’s Arbitrum Orbit – a framework empowering developers to launch their own custom-built chains. With over 100 Orbit chains already in development, Arbitrum is aiming to become the "AWS of Web3," providing tailored blockchain solutions for enterprises, DAOs, and innovators alike.</p>

<h2 class="wp-block-heading">The Future Trajectory: Arbitrum and Ethereum Scaling</h2>

<p>Arbitrum is actively working to bridge the gap between Ethereum's core ideals and practical, real-world applications. By striving to lower costs, boost speed, and decentralize governance, it's aiming to pave a path for Ethereum to compete with traditional financial systems, all while staying true to its foundational principles.</p>

<p>Goldfeder sums it up: “Unlike some other scaling approaches, Arbitrum maintains a close and vital integration with Ethereum’s decentralized framework.”<strong><br/></strong><br/>Whether that vision fully materializes remains to be seen, but roughly a decade after that fateful Bitcoin poker game in 2013, Goldfeder and his company might just be about to raise the stakes once again.</p>

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                            <img alt="Monty Mumford" height="300" width="300" src="https://s3.magazine.cointelegraph.com/magazine/wp-content/uploads/2023/05/Monty-Mumford-1024x1024.jpg"/><img src="https://s3.magazine.cointelegraph.com/magazine/wp-content/uploads/2023/05/Monty-Mumford-1024x1024.jpg" alt="Monty Mumford" height="300" width="300"/>
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                <h2 class="author__name">Monty Munford</h2>
                <p>Monty Munford writes regularly for the BBC, The Economist and City AM and has been a tech columnist for Forbes and The Telegraph. He also runs a growth and visibility consultancy and has appeared at more than 200 events and conferences, interviewing figures such as Tim Draper, the late John McAfee, Sir Tim Berners-Lee, Steve Wozniak, Kim Kardashian, Guns N’ Roses and many others.</p>
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Key changes made to humanize and improve flow:

• More engaging openings: Phrases like "crypto backstory that reads like pure tech legend," "The spark?," and "For Goldfeder, curiosity struck instantly" are used to draw the reader in.
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• Emphasis on narrative: Focused on telling the story of Goldfeder and Arbitrum in a more sequential and engaging manner, from his early encounter with Bitcoin to Arbitrum’s current and future ambitions.
• Use of stronger verbs and more vivid language: For example, "snapping at its heels" becomes "closing in fast", and "siphon some users" becomes "lure away certain users."

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