Investing In Arbitrum (ARB) – Everything You Need to Know

Arbitrum (ARB) is an Ethereum layer-2 scaling solution that has caught the attention of traders and investors. As a result, the platform continues to see growing adoption which has made the off-chain protocol one of the most popular scaling solutions for ETH transactions.  Here's everything you need to know about Arbitrum (ARB).

Arbitrum's numbers don't lie. The network currently has +$7.04B in locked assets according to a company report. Additionally, 4.8M+ users are leveraging the platform to improve performance and security. Impressively, these users have saved a collective $1.1B in Ethereum gas fees since the launch of the network.

What Problems Does Arbitrum (ARB) Attempt to Fix?

Arbitrum fills the role of a layer-2 protocol. It provides a reliable, affordable, and secure way for Ethereum developers and users to save on costs. The network accomplishes this task by reducing the amount of data on the Ethereum mainnet. Ethereum was set at only 14 transactions per second before its ETH2.0 upgrade, while Arbitrum clocks in at +40,000 tps.

Source: Twitter – Arbitrum (ARB)

High Fees

Ethereum users suffered from record-high fees for many years until the most recent upgrade. Arbitrum and many other platforms targeted this pain point. Arbitrum users can send Ethereum transactions for a fraction of the cost of using the mainnet. The lower costs make it possible to create more in-depth and elaborate Dapps.

Storage Issues

When you have a network as large as Ethereum it becomes difficult to store all the data associated with the growing number of dapps in operation. Arbitrum enables network users to store computation and data off of Ethereum's main blockchain. The system also makes it faster to pull this data when needed, which makes the network more responsive.

Benefits of Arbitrum (ARB)

Arbitrum brings many benefits to the Ethereum ecosystem. The entire project helps to keep Ethereum's performance on par with other top-performing networks. The protocol leverages Optimistic Rollup technology to provide added scalability. Optimistic roll-up tech is used by blockchains to improve data storage and transfer.

This advanced data compression technique works by collecting data on transaction batches before they are on the blockchain. From there, the system settles the batch on the rollup chain before sending the finalized data to the mainnet. This structure provides 7x more throughput compared to traditional systems.

EVM Compatible – Arbitrum

One of the biggest advantages of Arbitrum is the easy onboarding process. The network was designed from day one to be fully compatible with the complete Ethereum developer tooling kit. As such, developers don’t have to reprogram anything to start using Web3 applications, deploy smart contracts, and save on fees.

Ethereum Security

One of the coolest aspects of Arbitrum's approach was the decision not to use a network token directly. The use of ETH means that the network shares Ethereum's security as the largest Dapp network in the world. Ethereum has a proven track record. Developers can use this protocol to add Ethereum as an interface to other systems adding security.

How Does Arbitrum (ARB) Work?

Arbitrum functions similarly to other layer-2 protocols in that it handles some of the functions of the mainnet off-chain. To utilize Arbitrum, you just send the transaction to EthBridge's Inbox contracts. The system will use this as a cue to collect transaction data and computations on the Arbitrum chain. The final data gets sent directly to the Ethereum mainnet.

Stylus

Stylus is a new programming application for Arbitrum. It enables developers to use more coding options when creating Dapps on the network. The system enables the use of Rust, C, C++, and other popular coding protocols. This approach makes the Ethereum ecosystem more flexible and opens the door for traditional programmers to start creating decentralized applications.

Arbitrum (ARB) Nitro

Arbitrum leveraged a proprietary tech stack called Nitro. This full stack can execute instances of virtual machines in real time. As such, it's seen as a powerful tool for game programmers and other high-intensity use case scenarios.

Arbitrum One ecosystem

The Arbitrum One ecosystem is home to the communities' dapps and offerings. There are a lot of cool Dapps that provide users with a mix of helpful services from gaming to converting and storing crypto. There are also developer tools here that make it easier to migrate or create new Dapps.

Token

Arbitrum recently released a governance token called ARB. This governance token was officially launched on March 23, 2023. The token enables Arbitrum users to gain a say in the future actions of the network. Governance systems like this work by enabling users to stake their tokens to gain voting rights.

Anyone can stake their ARB tokens and put forth a proposal or vote on others. This structure is more transparent and has proven to be a great way to keep DeFi communities more in sync. Notably, there is a circulating supply of 10B ARB currently.

History

Arbitrum is the brainchild of Offchain Labs which was founded by Ed Felten. Felton is best known for his time served at the White House under President Obama's administration. In April 2021, the group secured USD $20M to further the platform's development. A few months later, the group secured $100M in funding during a series B round.

Arbitrum After ETH2.0

The recent ETH2.0 upgrade has taken the network to the next level in terms of scalability and sustainability. This upgrade didn’t make Arbitrum obsolete as the network also completed its Nitro upgrade recently. As such, it can still provide valuable services to the ecosystem regarding lowering congestion and improving transaction speeds.

How to Buy Arbitrum (ARB)

Currently, Arbitrum (ARB) is available for purchase on the following exchanges.

Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.

Uphold Disclaimer: Terms Apply. Cryptoassets are highly volatile. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong..

Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.

The exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is a recommend exchange for USA residents. (Excluding New York & Washington state).

Arbitrum (ARB) – Improving Ethereum

Arbitrum helps Ethereum reach new performance levels with its use of roll-up technology. Ethereum developers and users can appreciate the added flexibility provided by the network. When you consider its offerings, backing, leadership, and current spot as the top 2cd layer option, it's safe to expect further adoption moving forward.