Arbitrum Acquires Prysmatic Labs, Leading Ethereum Client Team

Offchain Labs, the firm behind the dominant Ethereum (ETH) Layer 2 network Arbitrum, completes the acquisition of Prysmatic Labs. However, it looks like this significant M&A in Web3 is not making everyone happy.

Arbitrum acquired team of Prysm: Why is this crucial?

According to the official statement shared by Arbitrum’s Offchain Labs on its social media channels and main blog, it has acquired Prysmatic Labs.

We’re extremely happy to announce that we (@OffchainLabs) are acquiring @prylabs, the team behind Ethereum’s leading consensus client!

Let’s dive into details!🧵👇https://t.co/qIp5JqvZRi

— Arbitrum (@arbitrum) October 12, 2022

The Prysmatic Labs team created and maintained Prysm, the most popular Ethereum (ETH) consensus client. After the acquisition, the devs will continue its work on “neutral and open-source” client and other Ethereum (ETH) ecosystem initiatives.

Raul Jordan of Prysmatic Labs is excited by the deal and highlights the importance of this acquisition for the progress and adoption of what he is building:

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Our mission from day one was to scale Ethereum and make it an impactful technology for the world. Merging with Offchain Labs made perfect sense to us as an Ethereum team because: (1) we develop software extensively in Go, (2) are fully incentive-aligned with the success of Ethereum, and (3) are focused on shipping quality software for others to use.

Steven Goldfeder of Offchain Labs is excited by the level of engineering behind Prysm and is optimistic about the impressive prospects of working together:

Prysmatic Labs possesses an incredibly talented team of engineers, and their dedication to the Ethereum community shows via their best-in-class product that is used broadly in the Ethereum ecosystem. We are looking forward to the integration of the Prysmatic Labs team as we work together to scale Ethereum.

Optimism’s Kelvin Fichter: “Ethereum’s governance structure is now for sale”

At the same time, Kelvin Fichter, co-founder of Optimism, Arbitrum’s largest competitor, stresses that by acquiring Prysm, Arbitrum has “bought” a place in the ACD workflow:

Arbitrum has acquired Prysmatic Labs, the maintainer of the most widely used Ethereum consensus client. 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. https://t.co/kFDLXMwPI3

— smartcontracts.eth (✨🔴_🔴✨) (@kelvinfichter) October 12, 2022

That said, he is deeply concerned about the possible effects this acquisition will have on the progress of Ethereum’s (ETH) decentralization and democracy. All other client teams will be sooner or later targeted by M&A deals, he added.

As per L2Beat, Arbitrum is responsible for 50% of Ethereum’s L2 TVL, while Optimism-based protocols see 30% of net TVL locked.