Arbitrum, a cutting-edge Ethereum layer-two (L2) scaling solution, employs optimistic rollups to deliver enhanced speed, scalability, and cost-effectiveness on the Ethereum network. By leveraging Ethereum’s security and compatibility while offering superior throughput and reduced fees, Arbitrum shifts the majority of computation and storage requirements off-chain.
The native token of Arbitrum, known as ARB, serves a governance role. Offchain Labs, the company behind Arbitrum’s development, has transitioned to a decentralized autonomous organization (DAO) structure known as the Arbitrum DAO. This allows ARB holders to vote on proposals affecting protocol upgrades, feature changes, resource allocation, and the election of a Security Council.
Aiming high in 2023, Arbitrum’s roadmap features the launch of its layer-three solution, Orbit, the ability for developers to deploy programs using popular programming languages like Rust and C++ through Stylus, an expanded validator set with more independent institutional validators, and a move to layer two with Arbitrum One.
On March 16, 2023, Arbitrum revealed their much-anticipated ARB airdrop. With 12.75% of the total supply to be distributed, early users and DAOs building on Arbitrum will receive the token. Based on a point system, recipients were rewarded according to their interaction with the Arbitrum network until a cutoff date of March 1, 2023. The token generation event is scheduled for March 23, 2023.
Offchain Labs, a New York-based development company, is responsible for creating Arbitrum. Founders Ed Felten, Steven Goldfeder, and Harry Kalodner are former Princeton University researchers with extensive experience in computer science, cryptography, and blockchain.
Arbitrum distinguishes itself from other Ethereum scaling solutions through its use of optimistic rollups. Claiming multiple advantages over competing rollup solutions, Arbitrum offers:
- Compatibility: Arbitrum supports unmodified EVM contracts and transactions, enabling any existing Ethereum DApp to run on Arbitrum without code alterations.
- Scalability: Arbitrum can process thousands of transactions per second at low costs and with rapid finality while retaining Ethereum’s security guarantees.
- Flexibility: With Stylus, its upcoming EVM+ equivalence feature, Arbitrum permits developers to deploy programs using popular programming languages like Rust and C++.
- Decentralization: Rather than relying on a centralized operator or sequencer for transaction ordering, Arbitrum uses a decentralized network of validators who stake ARB tokens and earn fees for securing the network.
In addition to these features, Arbitrum boasts a thriving ecosystem of DApps, wallets, tools, and partners, making it a leading scaling solution for Ethereum. Numerous protocols are available on the network, including GMX, Treasure, Camelot, Radiant Capital, Vela Exchange, ZyberSwap, Dopex, PlutusDAO, TridentDAO, and Jones DAO.
Arbitrum’s growth is evident in its total value locked (TVL) metric. As reported by DeFiLlama, Arbitrum’s peak TVL reached $3.2 billion in November 2021 and currently sits around $1.85 billion, giving it the highest TVL among all Layer 2 ecosystems.