What is Arbitrum (ARB)?

What is Arbitrum (ARB)?

Arbitrum is a prominent layer-2 blockchain designed to securely scale Ethereum, developed by Offchain Labs. At the time of writing, the network hosts almost 500 protocols, and secures approximately $3.18 billion in TVL.  

Arbitrum was founded by Ed Felten, formerly President Obama’s deputy Chief Technology Officer, Steven Goldfeder (CEO) and Harry Kalodner (CTO). The three co-founders met at Princeton University.

Arbitrum - in their own words

Arbitrum is an Ethereum layer-two (L2) scaling solution, and uses optimistic rollups to achieve its goal of improving speed, scalability, and cost-efficiency on Ethereum, while still benefiting from the security and compatibility of Ethereum. By offloading a majority of the computation and storage from the Ethereum mainnet, Arbitrum is able to achieve significantly higher throughput, with lower fees. Arbitrum has attracted several protocols to its ecosystem, including top projects like Aave (AAVE), Chainlink (LINK), and Sushiswap (SUSHI). Arbitrum is governed by a decentralized autonomous organization (DAO) — the Arbitrum DAO.

ARB utility?

ARB is the native token of the Arbitrum Network and is used for governance. Holders of ARB are able to vote on proposals that may impact features, protocol upgrades, fund allocation, and election of a Security Council. The Security Council is a group of 12 members elected by Arbitrum DAO participants, and are responsible for addressing risks within the Arbitrum ecosystem. 

What does this mean for ETH?

Arbitrum ETH is easily accessible for exchanges, fintechs, institutional traders, and developers, and provides a fast, low-cost alternative to operating on the Ethereum network. This enables several use-cases, including:

• Near instantaneous programmatic payments, anywhere in the world
• Trading, borrowing, lending etc. through blockchain applications
• Payments for e-commerce, NFT marketplaces, gaming, and more

For more on Arbitrum, check out their Medium page here.

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