What is Arbitrum, and how is it helping scale Ethereum?

If asked, what are the essential characteristics of Gen Z, people would primarily respond, ‘A fast-paced life, getting things quick and easy, doing multiple things at the same time, etc.’ As the primary target audience of the crypto market is Gen Z, cryptocurrencies must stay updated to remain ahead of their competitors. So what are the factors that can slow down a particular blockchain? Too much traffic at a time, slow transaction speed, etc.

Ethereum is known for its low transaction fees and high transaction speed. Therefore, it is known to give competition to the oldest cryptocurrency, Bitcoin, which holds a good base due to its early market capture. So what does Arbitrum have to do with the speed and fees of Ethereum? How is it scaling Ethereum? These are some of the questions we will address in this blog, so grab a cup of coffee and enjoy your read!

What is Arbitrum?

Arbitrum is a primary L2 (layer-two) solution of Ethernet that helps prevent congestion and high gas fees on the Ethereum mainnet. It utilizes optimistic rollups for scaling. There is no need to get worried by another jargon in the crypto world as we have covered you. Optimistic Rollups can be understood by understanding the meaning of the individual terms. Arbitrum rolls up several transactions into one transaction on the Ethereum mainnet. This prevents mainnet congestion and reduces gas costs. These rollups are optimistic as they are validated transactions and have no chance for fraud. Validations can be challenged within one week.

Transactions are processed on a proprietary sidechain, and the new chain state is after that relayed to the Ethereum mainnet. Arbitrum achieves a throughput of up to 40,000 transactions per second by this method, significantly lowering gas costs on the Ethereum mainnet. Arbitrum is a middleman that processes the transaction (on layer two) and conveys the details to the Ethereum mainnet (on layer one).

Arbitrum runs EVM (Ethereum Virtual Machine) compatible smart contracts that are secured by the Ethereum mainnet. Since transactions are not processed on the mainnet, a negligible amount of storage space is utilized for data storage on Arbitrum.

Arbitrum Token

Majority of the crypto enthusiasts must have come across a native token for every crypto blockchain. However, as of the time of writing this blog, Arbitrum does not have a native token. Users can look out for Arbitrum tokens that are predicted to be airdropped soon. Meanwhile, users can utiilize Arbitrum’s DApps (Decentralized Applications) to increase their chances of gaining access to native Arbitrum tokens.

How to get started with Arbitrum

Here are a few simple steps that you could follow to utilize the features of the Arbitrum Bridge.

Step 1: Connect to the platform.

Step 2: Transfer ETH to Aribtrum One Portal.

Step 3: Add the Arbitrum network to your wallet.

Applications supported on Arbitrum

• Arbitrum supports a good set of decentralized exchanges such as GMX, Uniswap, SushiSwap, Curve, and Balancer.
• Arbitrum users have access to some of the best lending protocols such as Stargate Finance, Vesta, Aave, and dForce.
• Best Decentralized Applications available on Arbitrum are Beefy Finance, Jones DAO, Dopex and Sperax USD.

Key features of Arbitrum

• Its future versions might support two other modes know as AnyTrust sidechains and channels.
• It was launched in 2021 by Offchain Labs.
• The platform has its own Virtual Machine known as Arbitrum Virtual Machine.
• It is compatible with EVM at a bytecode level.
• Does not require the download of any external plugins, compilers, etc., to get started with the platform.
• The platform enjoys the security offered by the Ethereum mainnet.