Offchain Labs, the team behind ethereum’s second layer Arbitrum, has bought out Prysmatic Labs. Preston Van Loon of Prysmatic Labs said:
“These two world class teams are value aligned in their work to scale Ethereum and a close collaboration between Layer 1 and Layer 2 can allow for these technologies to iterate and deliver faster. Scaling Ethereum is more important than ever and this merge will help Ethereum further its impact globally.”
Neither revealed just how much was paid for the acquisition, with the decision somewhat controversial as Kelvin Fichter of Op Labs, which focuses on a competing second layer Optimism, states:
“In exchange for cash, Arbitrum has put itself in the position of a ‘core Ethereum maintainer’ and now has Arbitrum engineers in a central part of the Ethereum dev process.
Left unchecked, this almost certainly results in other client teams becoming the target of major acquisitions.
It’s now obvious that sufficient dollar amounts can place companies in core positions of the Ethereum power structure.”
Arbitrum currently has close to $2.4 billion in assets in its second layer, nearly twice Optimism’s $1.4 billion.
While Prysm used to dominate ethereum Proof of Stake (PoS) nodes, but that has significantly changed with it falling behind Lighthouse.
Now that ethereum has gone full PoS, it is crucial that no node client has more than 33% market share as it could otherwise bring the whole network down.
While previously therefore Prysm in a dominant position could have influenced core development, there are numerous other factors that keep that in check, including the 33% threshold.
Prysm could however in theory delay the implementation of a feature upgrade by being very slow to rollout their updated client.
The concern here by Optimism may instead be more in regards to cultural influence as while previously the eth2 teams and the L2 teams were separate, at least one of them has merged.
“With this merge, the Prysm team can faster deliver on core protocol development while working closely with the future of Layer 2 technologies,” Loon said.
Arbitrum also pointed out that Prysm is “one of the teams leading the effort to bring EIP-4844 data-sharding to production.”
Data sharding is a protocol level feature that parallelizes data storage, allowing second layers to scale significantly more.
In those details of implementation, if Optimism and Arbitrum have different data sharding requirements, there could potentially be a conflict of interest if one gains more from a certain way of implementation, or indeed causes inconveniences to the other.
Something that would risk core development becoming confrontational, which so far has been avoided to a large extent.
