Arbitrum is an Ethereum scaling solution based on the Optimistic rollup protocol. It will facilitate low-cost smart contracts with high throughput while leveraging the security and decentralized features of Ethereum. There is no Arbitrum token, the protocol is built on-top of the Ethereum blockchain. Arbitrum users will essentially be opening ‘bar tabs’ on the Ethereum network, allowing users to make several transactions and ‘roll the up’ as one bulk transaction at a later time.
Transaction fees on the Ethereum blockchain is too damn high for everyday users, especially during times of network congestion where fees can cost more than $20. It claims to reduce Ethereum gas fees by more than 50x. Average gas fees for the Ethereum network right now costs $5 – $7.
Arbitrum is onboarding AAVE, Curve, MakerDAO, Sushiswap, Uniswap, and Cream Finance, among other dapps built on Ethereum. The aforementioned dapps are ‘blue-chips’ with more than $1B in total-value-locked (TVL), in total they share $38B in TVL. There’s currently $110B in Ethereum’s defi ecosystem or more than 70% of all of defi.
Bonus: Cryptocurrency’s MOON token is built on the Arbitrum network. With a public mainnet launch, we could possibly see easy to access liquidity pools for MOONs. Note: For the first few months, it will be semi-centralized to ensure the safety of the protocol and funds while users get familiarized with the protocol.