What is Arbitrum?
Arbitrum (ARB) is a cutting-edge scaling solution designed to enhance the Ethereum network. Developed by New York-based company Offchain Labs, Arbitrum has transitioned into a decentralised autonomous organisation (DAO), which enables cheaper and faster transactions for its users.
How Arbitrum Works
Arbitrum operates using layer-2 scaling solutions and optimistic rollups to dramatically improve speed, scalability, and cost-efficiency on the Ethereum network. By enhancing the base layer of Ethereum, Arbitrum enables users to enjoy quicker transaction times and lower costs.
Layer-2 Scaling Solutions
The primary goal of layer-2 solutions like Arbitrum is to alleviate congestion on the Ethereum network. These solutions work by processing transactions off the main Ethereum chain while still benefiting from the security guarantees of the Ethereum blockchain.
Optimistic Rollups
Optimistic rollups are a key technology within Arbitrum. This method allows a large number of transactions to be bundled and submitted as a single transaction, reducing overall network congestion and enhancing throughput. Arbitrum claims its technology can handle up to 40,000 transactions per second.
Developer Benefits
With a robust suite of Ethereum development tools available on Arbitrum, developers can create and launch decentralised applications (dApps) more efficiently. The platform offers a distinctive advantage due to its significantly lower fees compared to transactions executed directly on the Ethereum mainnet.
ARB Token and Governance
ARB is the native token of the Arbitrum ecosystem and serves a critical role in its governance. As a governance token, ARB allows holders to participate in decision-making processes regarding the platform’s on-chain governance protocols. This transition to a DAO empowers the community of ARB holders, giving them a voice in the continuous evolution of the Arbitrum platform.
Future of Arbitrum
With its development into a DAO, Arbitrum is entering a new phase, enabling greater community involvement and control over its future direction. This significant shift aims to foster a collaborative environment for both users and developers within the ecosystem.
Official Resources
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