What is Arbitrum?

Arbitrum is a layer-2 scaling solution for Ethereum. It is designed to improve the scalability and efficiency of the Ethereum blockchain. Ethereum can sometimes get slow and expensive due to too many people using it at once, causing high fees and slow transactions. Arbitrum fixes this by using a clever method called Optimistic Rollup.

Optimistic Rollup is like taking some of the heavy lifting away from Ethereum but still keeping it safe and secure. Imagine moving some of the work to a separate, faster track while keeping an eye on things to make sure everything is legit. So, Arbitrum’s job is to speed up Ethereum and reduce costs by using Optimistic Rollup, making it a win-win for Ethereum users.

How does Arbitrum work? 

Arbitrum operates as an Optimistic Rollup technology, a concept that brings significant enhancements to smart contracts. In simple terms, it facilitates the scaling of Ethereum smart contracts by enabling them to communicate between the Ethereum main chain and the Arbitrum second layer chain. Much of the heavy lifting for transaction processing occurs on this second layer, with the outcomes securely documented on the main Ethereum chain. This approach leads to a remarkable improvement in speed and overall efficiency.

The “optimistic” aspect comes into play as any validator has the authority to post a rollup block and confirm the validity of the other blocks. Think of it as a trust-first approach, but with a readiness to double-check if suspicions arise. This not only encourages honesty among validators but also strengthens network security against collusion and potential attacks. Arbitrum also introduces a challenge mechanism for rollup blocks, allowing other validators to verify block correctness and raise challenges if they suspect errors.

Additionally, Arbitrum allows individual nodes to participate in its network. Validator nodes monitor the chain’s status while full nodes assist in aggregating layer 1 transactions. Those who submit transactions to the layer 1 chain, known as aggregators earn rewards in Ethereum (ETH). Meanwhile, user transaction fees are distributed to various network participants, including validators. Arbitrum has its custom execution environment called the Arbitrum Virtual Machine (AVM). This AVM is where Arbitrum smart contracts run, situated above the EthBridge, which acts as a connection point between the Arbitrum chain and Ethereum. Ethereum-compatible smart contracts are seamlessly adapted to operate on the AVM.

What are some projects that are built on Arbitrum?

1. GMX - The DEX provides traders with features such as spot swaps and perpetual up to 50x leverage.

2. Radiant - a cross-chain Defi platform that enables users to deposit various major assets from different blockchain networks and borrow supported assets spanning multiple chains.

3. Treasure DAO - a decentralized NFT ecosystem built for metaverse projects on the Arbitrum network.

4.  Sperax - It’s the largest Layer-2 Ecosystem of Ethereum. Sperax hit a total of $20M TVL within 2 months since its launch.

5. ZyberSwap - this platform is a decentralized exchange (DEX) built on Arbitrum blockchain. It offers an automated market-maker (AMM) and low fees for swapping crypto assets.

What is the native token of Arbitrum, and what are its utilities?

The Arbitrum token, known as $ARB, serves as the primary digital asset on the Arbitrum blockchain. This token is fully compatible with the ERC-20 standard, making it versatile and useful in various ways. You can use $ARB for tasks like transferring value to others, as an investment, or participating in important governance decisions.

Token Utility:

• Grants you a seat at the governance table of the Arbitrum DAO.

• Vote on electing members for the Security Council (a 12-member team in charge of the treasury wallet).

 Where can I buy Arbitrum token?

Purchasing $ARB on a decentralized exchange is a relatively simple process:

Bridge your ETH: Begin by transferring your $ETH from Layer 1 Ethereum blockchain to Arbitrum using a bridge.  This step ensures that your assets are available on the Arbitrum Network.

Swap on Sushiswap: After successfully bridging your assets to Arbitrum, head over to Sushiwap, which is an exchange specifically designed for Arbitrum. Here, you can conveniently convert your Ethereum into $ARB tokens using the user-friendly swap interface.

Please Note: Every bridging transaction on the Arbitrum network needs an $ETH to cover the gas fees.