Arbitrum is a second-layer solution for Ethereum’s scalability problem. It is the most successful solution that has been developed for improving Ethereum’s scalability. Arbitrum is compatible with the Ethereum Virtual Machine (EVM) and will have a major role in the process of Ethereum’s mass adoption. An interesting point about Arbitrum is that it has no native tokens. Stay with us up to the end of this article to figure out what Arbitrum is, what unique features it has, and what factors have led to its success and popularity.

What is Arbitrum?

Arbitrum is an Ethereum-based “optimistic roll-up”. Optimistic roll-ups consider validators honest, till the opposite is proven. For this reason, they are called “optimistic”. Arbitrum aggregates and executes transactions off-chain. This way, it reduces the load of the main network and also the costs of transactions. This is why it is called “a second-layer solution”. By the way, the data belonging to all transactions is recorded on the first layer (here the Ethereum network). Therefore, all external observers can track the transactions and make sure of their validity.

In brief, Arbitrum seeks to improve Ethereum’s scalability and offer a solution to overcome this ever-existing problem. You know that Ethereum is suffering from low scalability and this challenge is harming its popularity and reputation. Low scalability has led to slow processing of transactions and high fees. Arbitrum is one of those scalability solutions which is of course very successful and popular.

How does Arbitrum work?

Arbitrum makes use of “Ethbridge”. Ethbridge is a collection of smart contracts that manage Arbitrum’s blocks and confirm their validity. On a higher layer, there is the Arbitrum Virtual Machine (AVM) that is completely compatible with the EVM and supports all EVM-related programming languages (like Solidity and Vyper). Arbitrum’s full nodes work on this layer. They service the applications and users through APIs. They run a local version of the AVM, process the transactions, and report the results. Arbitrum has some certain types of full nodes called “sequencers”. Sequencers, as their name suggests, can determine the sequence of transactions in a block. At the time of writing, only one Arbitrum sequencer exists that is managed by the Offchain Labs company.

Who created Arbitrum? The history of Arbitrum

Arbitrum was developed by the Offchain Labs company. This company was founded by Ed Felten, Steven Goldfeder, and Harry Kalodner. These three were professors and students of Computer Sciences at Princeton University and Arbitrum was the result of their academic research.

The first official version of Arbitrum called Arbitrum One was released on August 31, 2021. This project has attracted the attention of giant investors and has collected 120 million dollars in a series B funding round. This funding round was led by Lightspeed Venture Partners and among other notable investors we can refer to Coinbase ventures and Pantera Capital.

Does Arbitrum have a native token?

Arbitrum does NOT have a native token. The Arbitrum team has announced that this network doesn’t require a native token and it can achieve its aims without any tokens. Arbitrum’s smart contracts support all Ethereum-based tokens.

Conclusion

Arbitrum is Ethereum’s biggest roll-up now. In this article, we tried to explain how Arbitrum works, what aims it has, and who is supporting it. What do you think about Arbitrum? Have you ever used it? Are you optimistic about its future? Share your opinions with us.