# A Comparative Analysis: Optimism vs. Arbitrum By [Superchain Eco](https://paragraph.com/@superchaineco) · 2024-10-11 --- **Optimism overview** --------------------- [Optimism](https://boardroom.io/optimism/overview) is a layer 2 scaling solution that scales both transaction throughput and computation on Ethereum. Optimism enables low latency transactions for the speed of a Web 2.0 experience at a fraction of the cost, seamless interoperability between dApps and smart contracts, and enables developers preserve the Ethereum developer experience and migrate existing contracts without breaking them. ### **Governance infrastructure** Optimism has a useful governance infrastructure for voting and discussion. [Optimism Agora](https://vote.optimism.io/delegates) is the home of all voters. All [current proposals](https://vote.optimism.io/), voters and retroPGF records can be found on Agora. It also has a very active [forum](https://gov.optimism.io/c/delegates/41) that comprises categories for delegates, technical proposals, governance design and mission grants. General policies, governance discussions and feedback also go on regularly in their [discord](https://discord.com/channels/667044843901681675/968498307913637919). ### **Active governance contributors** Optimism’s active governance contributors include both [OP holders and delegates](https://community.optimism.io/docs/governance/howto-delegate/), with structured participation through [seasonal voting](https://community.optimism.io/docs/governance/token-house-history/#seasons-and-voting-cycles) and [reflection periods](https://community.optimism.io/docs/governance/token-house-history/#history). Currently (August 12, 2024), Optimism has 152,254 [delegates](https://boardroom.io/optimism/insights) and 647,686 [delegators](https://boardroom.io/optimism/insights). Out of the 152,254 delegates there have been 133,955 [voters](https://boardroom.io/optimism/voters) (20.7% of all delegators) on all [proposals](https://boardroom.io/optimism/proposals). The voters are represented by 226 active delegates per 1000 voting in at least one of the last 3 proposals, and 151 delegates per 1000 who have voted on at least 1 proposal in the past. 623 delegates per 1000 have never voted on any proposal. ![Source: boardroom ](https://storage.googleapis.com/papyrus_images/f5b7a4257e68d9ead2111842151ebf0e1ab4edd3a75528526eda47b5cf3570ea.png) Source: boardroom  From the image below, the top 200 delegates do hold 95% of voting power on proposals suggesting that protocol changes are decided by a few people. ![Source: boardroom insights](https://storage.googleapis.com/papyrus_images/57da3c73146fe4e7ed8cf9b1d3f3a822673094ff08461e134e005c60aa17cca5.png) Source: boardroom insights ### **Extent of governance capabilities** Delegates (OP token holders) directly influence on-chain changes through voting, while the Citizens' House oversees retroactive public goods funding and future governance powers. For accountability, the [Token House](https://community.optimism.io/token-house/token-house-overview) may vote to remove security council members at any time for severe violations of the Optimism [code of conduct](https://gov.optimism.io/t/code-of-conduct/5751) while the security council can also act unilaterally to remove their participant who fails to satisfy the requirements of this charter. In the 2nd quarter of 2024, a [protocol upgrade](https://thedefiant.io/news/blockchains/optimism-celebrates-stage-1-decentralization-with-permissionless-fault-proofs) finally allowed users to execute withdrawals without requiring actions from the centralized third parties but this has been [reverted](https://l2beat.com/scaling/projects/optimism#milestones-and-incidents) to permissioned proposals as part of a bug fix procedure. The network is expected to [return](https://l2beat.com/scaling/projects/optimism#milestones-and-incidents) to a permissionless state on the week of September 9th. ### **Robustness of governance process** Optimism has a [formal](https://community.optimism.io/docs/governance/token-house/) governance process. The governance process is fairly robust. This is evident in Optimism’s [experimental approach](https://community.optimism.io/docs/governance/what-is-the-optimism-foundation/#stewarding-the-early-evolution-of-collective-self-governance), including a [working constitution](https://gov.optimism.io/t/working-constitution-of-the-optimism-collective/55) that changes over time, balancing decentralization with flexibility. The constitution outlines governing provisions and principles for the [OP Collective](https://community.optimism.io/docs/governance/) while the Collective’s [operating manual](https://github.com/ethereum-optimism/OPerating-manual/blob/main/manual.md) describes current governance processes for the Optimism [Token House](https://community.optimism.io/docs/governance/#token-house). ### **Admin keys** Admin keys are managed by a [security council](https://gov.optimism.io/t/security-council-charter-v0-1/6884) via a Gnosis Safe multisig wallet, with a 75% threshold, ensuring controlled access to critical functions, namely **protocol upgrades** and **designation changes**. Each participant custodies and uses their key securely with the exception of a council lead who is not a key holder. The participants comprise a [2-of-2 multisig](https://etherscan.io/address/0x5a0Aae59D09fccBdDb6C6CcEB07B7279367C3d2A#readProxyContract) with the L2 proxy admin owner being the [aliased address](https://docs.optimism.io/chain/differences#address-aliasing) of the L1 proxy admin owner and a [5-of-7 multisig](https://etherscan.io/address/0x9BA6e03D8B90dE867373Db8cF1A58d2F7F006b3A#readProxyContract) **Arbitrum overview** --------------------- [Arbitrum](https://docs.arbitrum.io/build-decentralized-apps/public-chains#:~:text=Arbitrum%20One%20is%20a%20Layer,introducing%20no%20additional%20trust%20assumptions.) is a Layer 2 optimistic rollup chain that implements the Arbitrum Rollup protocol and settles to Ethereum's Layer 1 chain. It lets you build high-performance Ethereum dApps with low transaction costs and Ethereum-grade security guarantees, introducing no additional trust assumptions. ### **Governance Technology/Infrastructure** Arbitrum employs a developed governance infrastructure, using [Tally](https://www.tally.xyz/gov/arbitrum) for onchain voting, a [governance forum](https://forum.arbitrum.foundation/), [discord](https://discord.gg/arbitrum) and [telegram](https://t.me/arbitrum) for debate and discussion. The voting mechanism is reliable, and the protocol is supported by comprehensive documentation, making the governance process transparent and accessible. ### **Active Governance Contributors** Arbitrum governance sees active participation from $ARB token holders and delegates. There are currently 1.32M token [holders](https://www.tally.xyz/gov/arbitrum/delegates), most of whom have delegated to some 434.61k [delegates](https://www.tally.xyz/gov/arbitrum/delegates)  ‍ ![Source: Tally](https://storage.googleapis.com/papyrus_images/a1d5f6a97e850413143aff52811d216e81c5c7e09f054a90663ae5e7ef1c835b.png) Source: Tally [The last 5 proposals](https://www.tally.xyz/gov/arbitrum/proposals) have each seen at least 4k addresses participating in voting. However, according to [dune](https://dune.com/satsih/voting-power-within-the-arbitrum-dao) the top 240 delegates hold two-thirds of voting power in the DAO, while the top 50 delegates hold 56% of total voting power. Again, the top 4 delegates have 50% of the voting power of the top 50, and the top 10 delegates have 2/3rds of the voting power from the top 50. This means that for Arbitrum too, protocol changes are actually decided by a few people since they have weightier voting power. ### **Extent of Governance Capabilities** Arbitrum’s governance has a fairly substantial influence. Decisions directly impact on-chain changes through voting. This includes upgrading core contracts, authorizing new L2 chains, and other decisions crucial to the protocol’s growth. In case of a breach, users are able to [exit](https://l2beat.com/scaling/projects/arbitrum#stage) without the help of permissioned operators. The DAO has the authority to modify or revoke the powers of the security council. The DAO's decisions are tangible and binding, backed by an effective [constitution](https://docs.arbitrum.foundation/dao-glossary#the-constitution-of-the-arbitrum-dao) and  highlighting the significant role of distributed governance. ### **Robustness of Governance Process** Arbitrum's governance process is [formalized](https://docs.arbitrum.foundation/how-tos/vote-dao-proposals) and backed by its [constitution](https://docs.arbitrum.foundation/dao-constitution), which provides a clear framework for decision-making. It also states clearly how to [delegate voting power](https://docs.arbitrum.foundation/how-tos/select-delegate-voting-power) and how to [vote](https://docs.arbitrum.foundation/how-tos/vote-dao-proposals) as well. This structure promotes good governance by establishing norms and processes that guide the community's actions, ensuring that governance is both robust and adaptive. ### **Admin Keys** Arbitrum's [security council](https://docs.arbitrum.foundation/dao-glossary#security-council) holds the protocol’s admin keys critical for managing certain functionalities of the protocol. The council comprises 12 members who hold the private keys to a 12-member [multisignature wallet](https://docs.arbitrum.foundation/dao-glossary#multisignature-wallet). The admin keys allow the security council to intervene in emergency situations which include fixing vulnerabilities or upgrading the protocol, but the DAO has the authority to modify or revoke the powers of the security council. This  ensures a balance between security and decentralization. ‍ ### **Unique features, Strengths and Weaknesses of Optimism compared to Layer 2’s (Arbitrum)** The image below shows a summary of key points for Optimism’s strengths, weaknesses and unique features. ![](https://storage.googleapis.com/papyrus_images/8efc2c053c3936e721eb030efa07ad10912d1f593efed8759f9860308affbc66.png) ### **Areas of Improvement for Optimism** The image below touches on areas where Optimism could improve to enhance governance of its protocol. ‍ ![](https://storage.googleapis.com/papyrus_images/901b33ea6b56d8915ddac0e8e2a2b99aa261816eee32236f74218afa900a97e1.png) ### **Conclusion** Optimism stands out for its evolving and fairly robust governance structure, it faces challenges with centralization in decision-making power and lengthy decision making periods. Working on the areas highlighted for improvement will give its users complete ownership of the protocol and make it completely decentralized. ‍ ![\~ Disclaimer: This blog is for informational purposes only and is not financial advice](https://storage.googleapis.com/papyrus_images/ee0c70b4794c9f9cc9a9567a6b4792e33c2cc73d53c080f326f44bc47c0e9999.png) \\~ Disclaimer: This blog is for informational purposes only and is not financial advice --- *Originally published on [Superchain Eco](https://paragraph.com/@superchaineco/a-comparative-analysis-optimism-vs-arbitrum)*