What is Arbitrum? What is the use of Arbitrum Ecosystem Crypto?

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Due to the increasing demand for expansion and cost optimization, Layer 2 solutions are rapidly developing. Numerous new projects with new technologies are being launched to address existing issues. Some notable names in this field in recent times include Optimism, Metis, and StarkWare. Additionally, another potential name is Arbitrum. Let us explore this project and Arbitrum Ecosystem notable features through the following article in a formal and informative tone.

Table of Contents

What is Arbitrum?

Arbitrum Ecosystem is a set of open Layer 2 solutions designed to address congestion issues on the Ethereum network. Layer 2 refers to a technology or system that operates on Layer 1 and inherits its security properties, while also having the capability to process more transactions, reduce costs, and provide faster transaction confirmation times than Layer 1.

Arbitrum provides 3 scaling solutions: Rollup (OPU), Channels, Sidechains

State Channels: It is required of the user to send a snapshot of the Ethereum status into a Multi-sign Contract. This snapshot carries significant data, such as the balance of the address. An off-chain system of this nature enables transactions to be executed free of charge with immediate completion and high-end privacy.
Sidechains: The proprietary blockchains operate independently with their own separate consensus rules, allowing Ethereum transactions to be transferred under supervision to ease the burden on the primary Ethereum network.
Rollups: Similar to advanced, non-custodial sidechains, rollups can significantly enhance the scalability of Ethereum’s main network. To date, there are four main types of rollups that have been developed, namely, Optimistic Rollups, zkRollups, Plasma, and Validium.

What is Arbitrum One, AnyTrust, Arbitrum Nova, Arbitrum Nitro?

Offchain Labs, the parent company of Arbitrum, offers a range of product offerings such as Arbitrum AnyTrust, Arbitrum Nova, Arbitrum Nitro, and Arbitrum One.

Arbitrum One: Arbitrum One, alternatively known as Arbitrum, is a product that operates on the Optimistic Rollup technology and is specifically designed for the DeFi and NFT market.
Arbitrum Nitro: Arbitrum Nitro is not a separate chain, but rather an upgrade implemented on Arbitrum One with the aim of providing better performance and lower fees for its users. Additionally, Nitro employs the use of WASM virtual machine and Geth programming language.
AnyTrust: AnyTrust is a technology that is designed to optimize costs and speed, and its foundation is based on the assumption of “minimal trust.”
Arbitrum Nova: The Arbitrum Nova chain has been established using Offchain Labs’ AnyTrust technology and is targeted towards the Social, Gaming, and other industries that require the processing of large volumes of transactions at low fees.

What is Optimistic Rollup?

Rollup is a Layer 2 scaling solution that enables the bundling or “rolling” of transactions on a sidechain into a single aggregate block that is then recorded on the Ethereum blockchain. This provides the ability for transaction data on Layer 2 to be easily accessible on Layer 1, as needed, in order to verify state transitions. It should be noted that Rollup is an open source platform that offers improved scalability and reduced gas fees for developers building decentralized applications on the Ethereum network.

Optimistic Rollup is a solution for scaling off-chain transactions on the Ethereum platform. Transactions are executed off-chain, while the data is compressed and stored on the base layer to achieve consensus and verify the integrity and availability of data on the base layer. This approach helps to reduce the load on the Ethereum blockchain, improve transaction speed, and enhance the overall efficiency of the system.

Considering all the scaling solutions for Ethereum. Arbitrum is classified as follows: Ethereum Scaling Solution => Off-chain Scaling Solution (Layer 2) => Rollup => Optimistic Rollup => Arbitrum.

Along with Arbitrum, Optimistic Rollup has other projects such as Optimism, Boba Network, Metis, Fuel,…

Arbitrum’s Distinctive Features

Distinctive Features of Arbitrum

Arbitrum offers an extended solution within the Rollup model. The key distinguishing factor of Arbitrum pertains to the operational aspect of Fraud Proofs. For instance, in the event that an individual proposes a Rollup block and another person believes it to be incorrect, how will Arbitrum address this discrepancy?

Arbitrum is set to utilize a multi-round rollup protocol to address disputes, wherein it will break down the disputes into smaller ones until they become increasingly insignificant and subsequently resolve them on-chain.

Advantages of Arbitrum

The “multi-round rollup” approach adopted by Arbitrum enables a considerable reduction in costs associated with Fraud Proofs. The project aims to provide a low-cost solution that can be widely implemented while supporting highly complex transactions.
Arbitrum is fully compatible with Ethereum’s virtual machine (EVM), providing a comparable experience to working with smart contracts on L1 and compatibility with ETH tools. Additionally, Arbitrum can execute EVM code directly, without requiring the smart contracts to be recompiled.
The withdrawal time on Arbitrum is comparatively lower than that of other Rollup solutions like Optimism, which takes around 1-2 weeks. The project is presently exploring several other solutions to minimize the withdrawal time further.

Arbitrum ecosystem thrives

The Arbitrum Mainnet was launched in late May 2021, and since then, various projects and developers have been successful in developing their projects on Layer 2. As of March 2023, the Arbitrum ecosystem has become the fourth highest Total Value Locked (TVL) ecosystem in the market, with several notable projects currently running such as Uniswap, GMX, Sushiswap, Curve, and more.

Disadvantages of Arbitrum

The approach of utilizing “multi-round rollup” also leads to a prolonged dispute resolution process. In its ambition to support various other scaling solutions such as sidechains and channels, Arbitrum faces the challenge of navigating the complex transition between these solutions which is a matter of significant concern.

What is Arbitrum Token? Arbitrum Tokenomics

ARB is the native token of Arbitrum.

ARB Token Key Metric

Token Name: Arbitrum
Ticker: ARB
Blockchain: Arbitrum
Token Contract: 0x912CE59144191C1204E64559FE8253a0e49E6548
Token Type: Utility, Governance
Total Supply: 10,000,000,000 ARB
Circulating Supply: Updating…
Claiming live day: 23/3/2023

ARB Token Use Cases

ARB will have the following main functions:

Arbitrum DAO governance token
Support projects to develop on the ecosystem

ARB Token Allocation

DAO Treasury: 42.78%
Team & Advisors: 26.94%
Investors: 17.53%
Airdrop: 11.62%
DAOs on Arbitrum: 1.13%

ARB Token Release Schedule

ARB Tokens are allocated according to the following schedule:

DAO Treasury: Depends on holders through voting
Team & Advisors: 4 year allocation schedule with 1 lock year and 3 years linear allocation
Investors: 4 year allocation schedule with 1 lock year and 3 years linear allocation
Airdrop: Unlocked at block 16890400 (scheduled to take place at 19:55 March 23, 2023)
DAOs on Arbitrum: Unlocked at block 16890400

ARB Token Sale

Through three rounds of funding, Offchain Labs has allocated a total of 1,753,000,000 ARB to the group of investors, which represents 17.53% of the ARB supply. The details of each round are as follows:

How to buy Arbitrum

Centralized Exchange (CEX)

Arbitrum (ARB), a digital currency, is presently being listed on a number of cryptocurrency exchanges globally. In contrast to several mainstream digital currencies such as BTC, ETH, BNB, USDT, and others, ARB tokens can be effortlessly traded by individuals through the following steps: purchasing and selling.

Step 1: Initially, the first step in the process involves the purchase of the USDT. It is recommended to utilize reputable and secure exchanges such as Binance.com, widely acknowledged as the market leader in terms of trustworthiness, safety and superiority. Most traders have placed their trust in Binance.com and use it on a regular basis, given its unmatched track record and global standing in the domain of cryptocurrency trading.

It is advisable for those who do not have an account on this platform to immediately register for an account in order to begin buying and selling. The link to register for a Binance account

This Here

Additionally, I have composed a few detailed articles about this platform that individuals can refer to if they are not familiar with how to create an account or conduct transactions on this platform.

Step 2: After successfully purchasing USDT, it is advisable to transfer the funds to one of the following recommended exchanges in order to acquire ARB token.

The exchange supports buying and selling ARB tokens	Supported Trading Pairs
Binance.com	ARB/USDT
MEXC.com	ARB/USDT
Huobi.com	ARB/USDT
Bybit.com	ARB/USDT

Decentralized Exchange (DEX)

It is possible for users to perform ARB Token transactions through two platforms, namely Uniswap and SushiSwap, by entering the ARB Token contract address as follows:

0x912CE59144191C1204E64559FE8253a0e49E6548

Roadmap Arbitrum (ARB)

Arbitrum’s development journey is summarized below:

2018: Offchain Labs was founded in 2018 by Ed Felten tahu Princeton, New Jersey, USA.
October 14, 2020: Announcement of testnet launch with Arbitrum One.
May 27, 2021: Uniswap supports Arbitrum One.
August 13, 2021: Chainlink supports Arbitrum One.
August 30, 2021: Arbitrum teams up with team Etherscan to launch Arbiscan.
September 1, 2021: Arbitrum One officially Mainnet.
September 23, 2021: 1Inch supports Arbitrum One.
February 3, 2022: Announced the launch of AnyTrust Chains, later changed to AnyTrust technology and the chain is Arbitrum Nova.
March 17, 2022: Aave v3 supports Arbitrum One.
April 12, 2022: Arbitrum announces that it will launch Arbitrum Odyssey – This is a program to help users discover and use projects in the ecosystem, in addition they will receive a reward of NFT.
June 25, 2022: Norway uses Arbitrum to help people access companies that are not listed on the stock exchange.
June 29, 2022: Arbitrum suspends the Arbitrum Odyssey program due to overload.
12/7/2022: Announcement of the launch of Arbitrum Nova.
August 9, 2022: Arbitrum Nova is released. This is a layer 2 dedicated to gaming and social apps. The project has many large cooperation units such as Reddit, FTX, Consensys, Quicknode…
August 16, 2022: Arbitrum hires Andrew Saunders as chief marketing officer (CMO). He is a former marketing manager at Amazon and has many years of experience in entertainment and marketing.
August 31, 2022: Arbitrum One is officially upgraded to Arbitrum Nitro. This upgrade will bring higher performance and throughput to Arbitrum.
September 20, 2022: Arbitrum awarded 400 ETH (about half a million USD) to a character nicknamed 0xriptide for finding a bridge vulnerability between the Ethereum network and Arbitrum Nitro. If this vulnerability is attacked by hackers, the damage can be more than 250 million USD. Therefore, the action of 0xriptide gives much value to Arbitrum.
September 20, 2022: OpenSea supports the Arbitrum One network.
October 12, 2022: Offchain Labs acquires software development company Prysmatic Labs, the entity behind the Prysm software for running Proof-of-Stake Ethereum nodes.
October 12, 2022: Offchain Labs announces the acquisition of Prylabs. This is a Proof of Stake solution provider for Ethereum nodes.
11/16/2022: Announced plans to decentralize and attract more validators for Arbitrum.
December 1, 2022: TraderJoe – Avalanche’s largest DEX announces the development of Multichain to Arbitrum.
9/1/2023: OpenSea supports the Arbitrum One network.

Development Team, Investors & Partners

Development Team

As Arbitrum is a subsidiary company of Offchain Labs, which has a diverse range of products, this article will primarily focus on Offchain Labs for the most comprehensive information. It is worth noting that the following are the three co-founders and leaders of Arbitrum.

Ed Felten: Ed Felten, who is the co-founder and Chief Scientist of Offchain Labs, previously worked as a Professor of Computer Science and Public Affairs at Princeton University, where he held the Robert E. Kahn chair. From 2015 to 2017, he served as the Deputy United States Chief Technology Officer and Senior Advisor for Technology to the President in the White House. He is a member of the Association for Computing Machinery and a member of the National Academy of Engineering.
Steven Goldfeder: Steven Goldfeder, Co-founder and CEO of Offchain Labs, holds a doctorate degree from Princeton University, where he works at the intersection of cryptography and cryptocurrency. He is a co-author of the highly regarded textbook, Bitcoin and Cryptocurrency Technologies, which is considered a leading resource within the field of cryptocurrency.
Harry Kalodner: Harry Kalodner, one of the co-founders and the CTO of Offchain Labs, pursued his studies as a doctoral candidate at Princeton, where his research delved into the economic properties, anonymity, and compatibility-enhancing capabilities of cryptocurrencies.

Investors and partners

Investors and funding rounds

To date, Offchain Labs has raised $143.7 million from 3 different rounds with a peak valuation of $1.2 billion:

2019: Raised USD 3.7 million (Seed Round) lead by Pantera and other investor Compound VC,…
April 2021: Raised USD 20 million (Series A)
August 2021: Raised $120 million (Series B) – $1.2 billion valuation from Lightspeed Venture Partners and other investors including Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, Alameda Research and Mark Cuban.

Partner

Arbitrum has partnered with various development projects within the Layer 2 ecosystem, including well-known entities such as Uniswap, SushiSwap, GMX, AAVE, Curve, among many others, to advance their collective mission. These partnerships span across numerous large and small-scale initiatives, having a profound impact on the growth and success of the entire ecosystem.