What Is Arbitrum (ARB)?
Also known as: ARB, Arbitrum One, Arbitrum Network
In short
Arbitrum is an optimistic rollup-based Layer 2 scaling network that processes Ethereum transactions in batches off the main chain and records the results on Ethereum, offering faster and lower-fee transactions. Its governance token is ARB.
Arbitrum was developed by Offchain Labs. In the optimistic rollup model, transactions are assumed to be valid and batched transaction data is sent to Ethereum. If an incorrect state update is made, validators can challenge it within a set dispute period by submitting a fraud proof. For this reason, withdrawals from Arbitrum to Ethereum through the native bridge take about a week; third-party bridges can shorten this time.
Arbitrum is EVM-compatible; smart contracts written for Ethereum can be run largely without changes. The network hosts many DeFi applications such as decentralized exchanges, lending protocols and futures platforms, and gas fees are paid in ETH. In addition to the general-purpose Arbitrum One, the ecosystem also includes Arbitrum Nova, aimed at gaming and social applications.
ARB is the governance token of the Arbitrum DAO and was distributed through an airdrop in 2023. Token holders vote on matters such as protocol upgrades and treasury spending. The centralized nature of the sequencer that orders transactions and the long withdrawal time are among the debated limitations of optimistic rollups.
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