Arbitrum is a revolutionary suite of Ethereum scaling solutions supported by the Arbitrum token. It is making waves in the blockchain industry with its high-throughput, low-cost smart contracts. These solutions are underpinned by cutting-edge proofing technology deeply rooted in Ethereum. As of the end of July 2023, Arbitrum has market cap of $1.5 billion, secured a rollup market share of 64%, and amassed over 8.3 million users. The platform has also saved users a staggering $1.82 billion in Ethereum gas fees.
The native currency of Arbitrum, ARB, is utilized for governance purposes. Offchain Labs, the creators of Arbitrum, publicized their move to a decentralized autonomous organization (DAO) setup, specifically the Arbitrum DAO. Those in possession of ARB have the capacity to participate in voting on initiatives influencing feature enhancements, protocol improvements, the division of resources, and the selection of a Security Council.
Arbitrum has an aggressive strategy in place for 2023, involving: Launching its proprietary layer-three solution named Orbit; Facilitating developers to roll out applications written in widespread programming languages such as Rust, C++, and others via Stylus; Broadening its validator group to encompass more autonomous institutional validators; Transferring its protocol to layer two through Arbitrum One.
On March 16, 2023, Arbitrum disclosed their much-awaited ARB airdrop. The token is set to be airdropped to early adopters and DAOs that are developed on Arbitrum, with an allocation of 12.75% of the total supply set for distribution. Recipients were granted rewards based on a point system tied to their engagement with the Arbitrum network up until the cutoff date of March 1, 2023. The token creation event is slated for March 23, 2023.
Arbitrum Nitro is the driving force behind Arbitrum One and Nova, the two primary products of Arbitrum. Nitro is a proprietary technology stack powered by the blockchain network. It offers a next-generation rollup architecture that delivers seven times more throughput than Ethereum, coupled with lower fees, without compromising on security. This makes Arbitrum an attractive platform for projects and businesses looking to leverage the power of blockchain technology.
Arbitrum One is the hub for decentralized finance (DeFi) within the Arbitrum ecosystem. It hosts a plethora of decentralized applications (dApps), wallets, and tools, making it a vibrant ecosystem for DeFi enthusiasts and developers alike.
Arbitrum Nova is the platform’s answer to Web3 social and gaming applications. It is the home to Reddit’s community points and the next generation of gamers, providing a robust platform for social interaction and gaming on the blockchain.
The upcoming Stylus feature will allow users to deploy programs written in popular programming languages like Rust, C, C++, and more, alongside existing Solidity dApps on the same Arbitrum blockchain. This feature will significantly broaden the development capabilities on the Arbitrum platform, making it even more versatile and developer-friendly.
Transactions on the Arbitrum platform undergo a specific journey. Client software can make remote procedure calls (RPCs) to an Arbitrum node, using the standard Ethereum API, to interact with an Arbitrum chain. These transactions are then forwarded to the Arbitrum Sequencer, which reports transaction results much faster than a typical Ethereum node, usually within a second.
All Arbitrum transactions are posted on the Ethereum blockchain, ensuring that all the underlying data is available to users. Once a transaction has reached finality on Ethereum, it is considered final and can no longer be replaced or re-ordered. At this stage, the result of the transaction is fully determined.
While transaction data is posted on the Ethereum blockchain, the execution of transactions is moved off-chain and performed by Arbitrum validators. These validators report back their results of this off-chain processing in the form of an assertion, also known as a rollup block. The assertion is posted on Ethereum optimistically, with only a proof attached. Validators post a stake, which they stand to lose if they are caught attempting to deceive. This mechanism ensures that validators have a strong incentive to act honestly.
Once an assertion is posted, a challenge window opens during which any validator can challenge that assertion. If the assertion is found to be fraudulent, the validator who posted it will lose a large deposit, which becomes the reward for the validator who successfully proved the fraud. Importantly, it only takes one honest validator to guarantee correct execution.
Arbitrum was brought to life by Ed Felten, Steven Goldfeder, andHarry Kalodner. Ed Felten embarked on his extensive research in roll-up technology in 2014, even before the birth of Ethereum. After serving in the White House as President Obama’s Deputy CTO, he returned to Princeton University to resume his research with Steven Goldfeder and Harry Kalodner, who were both PhD students at the time.
The Arbitrum Foundation is steadfast in its commitment to decentralizing the Arbitrum platform. The creation of the Arbitrum DAO (Decentralized Autonomous Organization) marks a significant step towards this goal, making Arbitrum the first EVM rollup technology to achieve Stage 1 decentralization. The foundation maintains control over the chain ownership of both Arbitrum One and Arbitrum Nova, which is under the purview of the Arbitrum Governance system.
Execution on Arbitrum is validated to the Ethereum Mainnet by a set of validators. This set of validators has been expanded to include organizations across the ecosystem. For an incorrect transaction to be accepted, all validators would have to act maliciously.
The Sequencers for both Arbitrum One and Arbitrum Nova are currently maintained by the Arbitrum Foundation. The governance system currently has the power to select new Sequencers. Arbitrum Nova has a 7-party Data Availability Committee (DAC), whose members can be seen on the foundation’s website. The Arbitrum governance system currently has the power to change the DAC, by adding or removing members, or modifying the DAC’s role in the system.
Arbitrum is a promising platform that is making significant strides in scaling Ethereum. With its high-throughput, low-cost smart contracts, and industry-leading proving technology, Arbitrum is poised to play a significant role in the future of blockchain technology. The platform’s commitment to decentralization and its robust governance system further enhance its appeal to developers and users alike. As Arbitrum continues to innovate and grow, it will undoubtedly continue to shape the landscape of decentralized finance and blockchain technology.