Hot Features
Premium
Level up your trading with our powerful tools and real-time insights all in one place.
Arbitrum is a layer 2 scaling solution for Ethereum that aims to improve the scalability and performance of the Ethereum network. It was launched in August 2021 and is developed by Offchain Labs, a startup founded by Ed Felten, Steven Goldfeder, and Harry Kalodner, all of whom have backgrounds in computer science and blockchain technology.
Arbitrum uses a technique called optimistic rollups, which allows it to process a large number of transactions off-chain while still maintaining the security and decentralization of the Ethereum network. With optimistic rollups, transactions are first processed off-chain and then periodically verified on the Ethereum mainnet. This allows Arbitrum to achieve high throughput and low fees while still ensuring that the transactions are secure and tamper-proof.
One of the key advantages of Arbitrum is its compatibility with the Ethereum Virtual Machine (EVM), which means that existing Ethereum smart contracts can be easily ported over to Arbitrum without any modifications. This makes it easy for developers to build decentralized applications (dApps) on Arbitrum and take advantage of its high throughput and low fees.
One of the main disadvantages is the centralization risk, i.e., if a small number of validators gain too much power. The optimistic rollup design relies on a group of validators to process transactions and maintain the state of the network off-chain.
The native token of this platform is called ARB and is used for transaction fees and as a means of payment on the network.
Arbitrum Seems to Be the Latest Trend, as It Overtakes Ethereum in Daily Transactions
In the past month, we saw an impressive performance of the Arbitrum token in the crypto market, even though, this market is relatively new. This is due to the fact that the Arbitrum network sees more daily activity than the Ethereum network. In April, the Arbitrum network saw massive utility growth of about 581.56%. Arbitrum is quickly being adopted. Also, the Total Value Lock (TVL) in Arbitrum’s smart contracts has skyrocketed. This has catapulted Arbitrum to the fourth position in rank after the Binance blockchain, as its Total Value Locked (TVL) is $3.57 billion.
Arbitrum vs. Ethereum
Also, in regard to daily users’ activities or transactions, this market is leading the Ethereum network. Since the launch of the platform in 2021, user activities on the blockchain have grown progressively and impressively and are now effectively competing with the Ethereum network. On March 23, the day its token was launched, the network reached its all-time high. On that day, the TPD (that is, Total Transaction per Day) reached up to 2.72 million, while Ethereum recorded 1.07 million on the same day.
According to statistics, the average transaction cost on the Ethereum network is $0.0018 ETH (this is $3.47) per transfer, whereas the average transaction cost on the Arbitrum network is $0.33. The native token, ARB has been exchanged for prices ranging from $1.22 to $1.28 per unit.
Learn from market wizards: Books to take your trading to the next level.
