Scale securely on Ethereum. Go onchain with Arbitrum’s battle-tested and market-leading L2 technology.

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🟪 Community Values - Arbitrum should be fundamentally aligned with the Ethereum ecosystem and a constructive member of the Ethereum community. - Decisions about technology, fee economics, and resource allocation should optimize for the long-term health of the ecosystem. - Ordinary people with ordinary computers should be able to fully participate in the Arbitrum protocol. - The community should be open and welcoming to all people who wish to participate constructively. - Arbitrum governance should not pick winners or losers, but should foster open innovation, interoperation, user choice, and healthy competition on Arbitrum chains.

⬜️ #1 - Gas in Arbitrum ⬜️ L1 Gas: Paid to cover the future batches on L1. It is the majority of the commission and depends on the calldata size of the transaction and the calldata value in L1. At the time of the transaction, you can only estimate its approximate ratio to the size of the future batches. In other words, the L1 component is meant to compensate the Sequencer for the cost of posting transactions on L1 . ⬜️ L2 Gas: Works similarly to commissions in Ethereum Mainnet — it is a transaction execution fee on L2. The L2 component covers the cost of operating the L2 chain; it uses Geth for gas calculation and thus behaves nearly identically to L1 Ethereum. One difference is that unlike on Ethereum, Arbitrum chains enforce a gas price floor, currently 0.1 gwei on Arbitrum One and 0.01 gwei on Nova (See Gas). L2 Gas price adjusts responsively to chain congestion, ala EIP 1559.

🟧 #2 Arbitrum vs. Optimism From the community side, Arbitrum does not have a decentralized autonomous organization (DAO) system. Offchain Labs fully govern it. In contrast, Optimism has a DAO governance system called Optimism Collective. The holders of the Optimism native token (OP) have the right to participate in decision-making to determine the development of the protocol.

🟧 #1 Arbitrum vs. Optimism Arbitrum is not the only Layer 2 blockchain that is a scalability solution on the Ethereum network. It has a main competitor, namely Optimism. Both use optimistic rollup to speed up the transaction process on Ethereum. However, there are some fundamental differences between the two, which are as follows. In solving the problem of incorrect transactions, Arbitrum uses multi-round fraud proofs and is executed off-chain. Meanwhile, Optimism uses single-round fraud proofs. Arbitrum’s multi-round fraud proofs system is more robust, cheaper, and more efficient than Optimism’s single-round fraud proofs system.

🟩 Arbitrum Key Performances In the last quarter of 2022, Arbitrum recorded an average of 614.279 Monthly Active Addresses (MAA), a growth of 81.3% over the previous quarter, and an increase of 728.7% from a year earlier. Overall, despite the risk of network centralization, Arbitrum has a fairly strong foundation and is expected to continue its growth this year.

🟩 Arbitrum Key Performances According to data from DefiLlama, Arbitrum has a TVL of $1.4 billion US dollars. It is the fifth largest of any L1 or L2 and records a market share of 3% of TVL across all chains. Arbitrum’s market share has increased significantly over the past year, up from 1% among all chains a year ago. This increase is partially due to the growth of applications in the Arbitrum ecosystem, such as the GMX perpetual exchange.

🟪 #1 Advantages of Arbitrum Compatible with Ethereum Virtual Machine (EVM) The Ethereum network utilizes the Ethereum Virtual Machine (EVM) as its “computer” for executing smart contracts. Arbitrum has its own superior “supercomputer” known as the Arbitrum Virtual Machine (AVM). For higher-level instructions on Arbitrum Nitro, Arbitrum utilizes Web Assembly (WASM) instead of AVM. Arbitrum also natively supports all Ethereum development tools without any additional specialized plugins. It includes all smart contract languages, such as Solidity, which works well on Arbitrum. Therefore, dApps originally developed on Ethereum can easily migrate to Arbitrum with minimal code modifications.

🟪 #2 Advantages of Arbitrum Fast Transaction Processing and Low Fees With the Arbitrum Nitro upgrade (the old Arbitrum One called Arbitrum Classic), the optimistic rollup technology on this platform has advantages in transaction processing speed, lower fees, ease of operation, and more compatibility with EVM. As mentioned earlier, Arbitrum Nitro can process transactions 7-10 times faster than its predecessor (Arbitrum Classic).

🟪 #3 Advantages of Arbitrum It Has the Ethereum Security Level To run its system, Arbitrum uses ETH tokens. Therefore, it is secured by the Ethereum base layer because it does not have its token. Compared to other Layer 2 blockchains, such as Polygon, it has its token (MATIC) and is secured through its proof of stake consensus mechanism.

🟪 #4 Advantages of Arbitrum Arbitrum is the largest layer 2 on Ethereum running rollup technology with total locked funds of 1.44 billion US dollars. Currently, there are 184 protocols on Arbitrum, including GMX, Aave, Uniswap, and others.

🟦 #1 What is Arbitrum? Arbitrum is a layer 2 blockchain designed to increase scalability on the Ethereum blockchain. With Arbitrum, you can do everything on Ethereum with cheaper and faster transactions. For example, access to Web3 applications, deploy smart contracts, and more with Ethereum’s security system.

🟦 #2 What is Arbitrum? Arbitrum is developed by Offchain Labs, a US-based company focused on building scalability solutions on the Ethereum network. Offchain Labs was founded by Ed Felten, a professor of computer science at Princeton University and former deputy CTO (Chief Technology Officer) at the White House during President Obama’s administration. Along with his two partners, Steven Goldfeder, and Harry Kalodner, they published research results on Arbitrum technology in 2018.

🟦 #3 What is Arbitrum? In April 2021, Offchain Labs secured Serie A funding of 20 million US dollars. Shortly after, the company received another Serie B funding of 100 million US dollars. Lightspeed Venture Partners provided the funding. Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, and Mark Cuban are other investors involved.

⬜️ Arbitrum Transaction Cycle 1. Sequencer Receives Transaction The process starts with the Sequencer, a node that accepts transactions from users either directly or through the Delayed Inbox of the Layer 1 chain. 2. Sequencer Requests Transaction (off-chain) When a transaction is received, the Sequencer executes the transactions with the help of the Nitro Virtual Machine, and provides the user with a transaction receipt. 3. Sequencer posts transactions in one batch (on-chain) The Sequencer then posts a batch of transactions to Layer 1 every few minutes. 4. Validator asserts RBlock (rollup block) The Validator then asserts an RBlock by running the Virtual Machine over the transactions and making an on-chain assertion about the latest state of the chain. 5. RBlock confirmed at Layer 1 If there are no issues, the RBlock is confirmed at Layer 1, updating the Outbox root.

#3 🟧 How Does Arbitrum Work? Arbitrum says that every transaction confirmed through this process is stamped with an “AnyTrust Guarantee,” and all validators agree on the validity of the transactions contained in a block. Validators stake ETH before they can confirm a transaction; by staking ETH, they are incentivized to act honestly.

#2 🟧 How Does Arbitrum Work? Optimistic rollup is a specialized technique for rolling up transactions off-chain. To accelerate the data validation, the optimistic rollup assumes that the transactions in the rollup are valid. Arbitrum’s optimistic rollup is executed on top of Arbitrum’s rollup chain. Arbitrum collects the transaction batch, settles it on the Arbitrum rollup chain, and then inputs the transaction data back to the Ethereum blockchain.

#1 🟧 How Does Arbitrum Work? The technology behind Arbitrum is an optimistic rollup. Rollup is a type of data compression technique on blockchain transactions. It involves ‘rolling up’ a batch of transactions into a single transaction. The benefit is that the blockchain only needs to process one transaction, the ‘rolled up’ transaction, and does not need to confirm every single transaction.