Arbitrum

Arbitrum serves as a Layer 2 scaling solution for Ethereum, employing optimistic rollups to enhance speed, scalability, and cost-effectiveness. It retains the security and compatibility of Ethereum while offering greater throughput and reduced fees by shifting most of the computational and storage burdens off-chain.

The token native to Arbitrum is ARB, which plays a key role in governance. Offchain Labs, the minds behind Arbitrum, have introduced a transition to a decentralized autonomous organization (DAO) framework, known as the Arbitrum DAO. Holders of ARB have the power to vote on proposals related to protocol features, upgrades, fund allocations, and the election of a Security Council.

Arbitrum has a bold plan for 2023, which involves: launching a layer-three solution named Orbit; enabling developers to deploy applications in popular programming languages like Rust and C++ through Stylus; expanding its validator network to include more independent institutional validators; and shifting its protocol to Layer 2 with Arbitrum One.

On March 16, 2023, Arbitrum revealed the much-anticipated airdrop of ARB tokens. These tokens will be distributed to early adopters and DAOs building on Arbitrum, allocating 12.75% of the total supply. The distribution is based on a point system reflecting user engagement with the Arbitrum network as of March 1, 2023. The token generation event is set for March 23, 2023.

Arbitrum was developed by Offchain Labs, a New York-based technology firm. The founders, Ed Felten, Steven Goldfeder, and Harry Kalodner, are former Princeton University researchers with significant expertise in computer science, cryptography, and blockchain technology.

Ed Felten is a computer science professor at Princeton University and previously served as Deputy CTO under President Obama. He is a co-founder and the Chief Scientist at Offchain Labs.

Steven Goldfeder, a computer scientist and entrepreneur with a Ph.D. from Princeton, is also a co-founder and the CEO of Offchain Labs.

Harry Kalodner, a computer scientist and Ph.D. candidate at Princeton, completes the team as a co-founder and the CTO of Offchain Labs.

In 2021, Offchain Labs announced a successful Series B funding round, raising $120 million, led by Lightspeed Venture Partners, which valued the company at $1.2 billion. Other notable investors include Polychain Capital, Pantera Capital, and Mark Cuban.

Arbitrum differentiates itself by employing optimistic rollups, providing several benefits over other scaling solutions for Ethereum:

Compatibility: It supports unaltered EVM contracts and transactions, allowing existing Ethereum DApps to operate on Arbitrum without needing code modifications.

Scalability: Capable of processing thousands of transactions per second with low costs and rapid finality, Arbitrum maintains the robust security features of Ethereum.

Flexibility: Through its forthcoming EVM+ equivalence feature, Stylus, Arbitrum permits developers to work with widely-used programming languages like Rust and C++.

Decentralization: Rather than relying on a centralized operator, Arbitrum utilizes a decentralized validator network where validators stake ARB tokens and earn fees for network security.

Arbitrum hosts a thriving ecosystem of DApps, wallets, tools, and partners, positioning it as a leading Ethereum scaling solution.

The network supports various protocols, including GMX (GMX), Treasure (MAGIC), Camelot (GRAIL), Radiant Capital (RDNT), Vela Exchange (VELA), ZyberSwap (ZYB), Dopex (DPX), PlutusDAO (PLS), TridentDAO (PSI), Jones DAO (JONES), and others.

The growth of Arbitrum's ecosystem is reflected in its total value locked (TVL), which peaked at $3.2 billion in November 2021, and currently stands at approximately $1.85 billion, the highest among all Layer 2 ecosystems according to DeFiLlama.

ARB, the governance token of Arbitrum, is scheduled to launch on March 23, 2023, with 12.75% of its total supply distributed to eligible users and DAOs.

The ARB token facilitates decentralized governance within the Arbitrum ecosystem, allowing holders to vote on proposals affecting the Arbitrum One and Arbitrum Nova chains. They also influence the usage of the DAO treasury funds, including chain upgrades, network parameter changes, grant allocations, feature integrations, and more.

Unlike ETH on Ethereum, ARB is not used for gas fees. Instead, transaction fees on Arbitrum can be paid using ETH or any ERC-20 token supported by DApps. ARB holders can stake their tokens to earn fees for network security without spending their tokens.

The total ARB supply is capped at 10 billion, distributed as follows: Arbitrum DAO treasury: 42.78% (4.278 billion), Offchain Labs teams and advisors: 26.94% (2.694 billion), Investors: 17.53% (1.753 billion), airdrop to users: 11.62% (1.162 billion), and airdrop to DAOs: 1.13% (113 million).

Arbitrum leverages the security of the Ethereum network, which provides the consensus and finality for its transactions. Essentially, Ethereum assures the validity of Arbitrum’s off-chain calculations and the availability of the underlying data.

The system uses optimistic rollups, executing transactions off the main Ethereum network and bundling them before submitting them in batches. As implied by the term "optimistic," these off-chain transactions are assumed valid without initial proof. However, a dispute period is available after submission, allowing anyone to challenge transactions by providing fraud proof.

ARB can be bought on numerous centralized exchanges, including Binance, Coinbase, KuCoin, Bybit, Kraken, and Bitfinex, among others. It's also available on decentralized exchanges like Uniswap V3 (Ethereum), Uniswap V3 (Arbitrum), and SushiSwap (Arbitrum).

For real-time ARB price tracking, you can use the CMC mobile app.