What Is ARB (Arbitrum)?

Arbitrum is a solution for scaling Ethereum called layer-two (L2). It aims to enhance speed, scalability, and cost-effectiveness on Ethereum by utilizing optimistic rollups. Arbitrum (ARB) leverages the security and compatibility of Ethereum, while also offering higher throughput and lower fees compared to Ethereum. This is achieved by shifting a significant portion of computation and storage load off-chain.

ARB is the native token of Arbitrum and is utilized for governance purposes. Offchain Labs, the team responsible for Arbitrum, revealed the transition to a decentralized autonomous organization (DAO) format known as the Arbitrum DAO. Holders of ARB have the ability to participate in voting for proposals that impact various aspects such as features, protocol enhancements, fund distribution, and the selection of a Security Council.


  1. Improved Scalability: Arbitrum significantly increases the number of transactions that can be processed per second, alleviating congestion on the Ethereum network.
  2. Lower Transaction Fees: By handling transactions off-chain, Arbitrum reduces the gas fees associated with Ethereum transactions, making it more affordable for users and developers.
  3. Strong Security: Arbitrum leverages Ethereum’s security by settling transactions on the Ethereum mainnet, ensuring that it inherits Ethereum’s robust security measures.
  4. Compatibility: Arbitrum is fully compatible with Ethereum, allowing developers to use existing Ethereum smart contracts and tools without modification.
  5. Decentralization: Arbitrum maintains the decentralized nature of Ethereum, ensuring that no single entity controls the network.


  1. Complexity: As a layer 2 solution, Arbitrum adds an additional layer of complexity for developers and users who need to understand how it interacts with the main Ethereum network.
  2. Adoption: While gaining traction, Arbitrum is still relatively new, and widespread adoption is necessary for it to achieve its full potential.
  3. Competition: Arbitrum faces competition from other layer 2 solutions like Optimism and Polygon, which also aim to improve Ethereum’s scalability.

Why Is It Better?

Arbitrum offers several advantages over other solutions:

  • Enhanced Efficiency: By processing transactions off-chain and only using the Ethereum mainnet for final settlement, Arbitrum maximizes efficiency and minimizes costs.
  • EVM Compatibility: Arbitrum is fully compatible with the Ethereum Virtual Machine (EVM), making it easy for developers to port their applications without any changes.
  • Security: By relying on Ethereum’s mainnet for security, Arbitrum ensures that its transactions are secure and trustworthy.


Arbitrum represents a significant advancement in the effort to scale Ethereum, offering improved scalability, lower transaction fees, and strong security. While it introduces some complexity and faces competition, its benefits make it a promising solution for enhancing the Ethereum network. As more developers and users adopt Arbitrum, it has the potential to play a crucial role in the future of decentralized applications and the broader blockchain ecosystem.