The fundamental difference between the two mentioned above is that Etherum Arbitrum doesn’t increase the traffic pressure on Etherum’s mainnet instead it allows off-chain computation. This comparison was done by the Haskell dev Matthias Benkort, a lead soft engineer at IOG (Input Output Global).
Haskell dev Matthias benkort, IOG (Input Output Global) lead engineer shared a thread comparing Etherum’s solution Arbitrum and Cardano’s protocol. He mentioned that there are some basic differences between these two.
Etherum Arbitrum vs Cardano’s Hydra
Arbitrum of Etherum does not increase the traffic on the mainnet of Etherum rather it provides the facility of using off-chain computation to users. It results in reducing costs for users and dApps. This way is more efficient because the on-chain computation can make the system slow and increases the securities risks.
On the other hand, Cardano with a highly secure isomorphic structure performs the mainstream scaling concept of state channel.
Etherum Aribtrum has its virtual machine but Cardano doesn’t have it. To counter virtual machine Cardano’s Hydro has its battle-tested design of Cardano L1. The transaction in Cardano’s Hydra is much faster than Etherum Arbitrum. Mr. Haskell compared it to the record in poker game processes. He said:
In a Hydra head, transactions are settled MUCH faster than on the underlying L1. Think of it as a poker table that you join with a bunch of chips. Many things happen at the table during the game, but only the final state gets recorded at the end of the game, not all the actions.
Dispute over transactions can be resolved more easily with Cardano’s Proof of Stake (PoS) or extended UTXO model (EUTXO) than Etherum’s Proof of Work (PoW).
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