Layer 2 Networks Arbitrum and Optimism Face Scrutiny Over Centralized Transaction Control

The promise of Ethereum Layer 2 networks is faster and cheaper transactions that inherit the security of the main Ethereum blockchain. However, a close reading of documentation and independent research reveals a more complicated reality on Arbitrum and Optimism.

Both networks rely on a single centralized operator called a sequencer to order transactions before they reach Ethereum. This means users receive 'soft finality', provisional confirmation dependent entirely on the sequencer behaving honestly.

The differences between how each network handles censorship resistance, forced transaction inclusion, and fraud proofs have significant implications for users who assume their transactions are settled once a wallet shows confirmation.