Let’s roll up our sleeves and get into the weeds about Ethereum’s star rollup–Arbitrum. Lots of crypto activity and communities have found a home on this chain, from meme coins to NFTs and more.
Let’s take you through what Arbitrum is, how it works, what it offers, and how you can get your hands on the latest NFT mints on Arbitrum.
Arbitrum is a popular Layer 2 that offers much faster and cheaper transactions to make the Ethereum ecosystem more usable.
As a Layer 2 chain, Arbitrum is inextricably linked to its mothership, Ethereum, while offering its own suite of features—leveraging Ethereum’s security and Arbitrum’s unique advantages, including the ability to deploy custom chains. Not bad, right?
That’s what makes Arbitrum a great choice if you’re looking for a more affordable and versatile blockchain solution that still has the familiarity of the Ethereum ecosystem.
At its most basic level—and we mean the really basic level—the Arbitrum Network works like this: it computes transactions off-chain, bundles them together, and then settles them on the Ethereum blockchain.
The bundling and batch-verification is what makes transacting on Arbitrum faster and cheaper than transacting directly on Ethereum. In crypto-native blockchain terms, this is what’s called a rollup.
Arbitrum’s rollups are known as “optimistic” rollups. Why so “optimistic” you may ask? Well, because Arbitrum assumes that each batch of information that gets bundled is valid.
However, there’s a period of time in which people, called Challengers, can challenge this claim, double-checking the rollup through a dispute resolution protocol, but if nobody challenges it, Arbitrum simply confirms the rollup block as correct. That’s it!
The beauty of all of this is that Arbitrum doesn’t use any special tokens for paying gas fees; instead, Arbitrum uses gwei, a denomination of ETH used on Ethereum’s (Layer 1) blockchain as well.
However, this Layer 2 scaling solution still has its own token, $ARB, that is used in the governance of this protocol.
Now that we’ve established its basic operations, let’s look into Arbitrum’s features you can use in your blockchain endeavors. Here’s what it’s got:
Arbitrum Rollups, also called optimistic rollups, are a tool that takes on-chain transactions, processes them off-chain (which is usually faster and cheaper than running transactions on-chain on Ethereum, the Layer 1), then bundles them up and sends them back on-chain to be settled at the Layer 1 level. ‘Optimistic’ means they’re considered valid until challenged and proven otherwise.
As mentioned above, a challenge is the first step in resolving any disputes. If any user has cause to believe some part of a rollup is not valid, they’re free to challenge it. There are two ways in which this is resolved: interactive proving, in which the dispute is solved off-chain by the two parties, and re-executing transactions, which means doing them again and checking if you get the same result.
When a dispute is settled, either the challenger or the party who posted the batch (“the prover”) will be wrong. Whoever that is will forfeit a deposit, while the correct gets a part of that deposit as a reward. This simultaneously penalizes fraud while disincentivizing spammy challenges.
Additionally, a part of the deposit is burned, so that the truth-teller also doesn’t actually benefit from the dispute. All of this helps to ensure there are very few attempts to cheat the system.
Arbitrum AnyTrust is a variation of its Nitro technology that makes your transactions on this chain even cheaper by assuming mild trust, instead of going for complete trustlessness.
In other words, AnyTrust relies on an external Data Availability Committee that stores data and proves it on demand, instead of having all Arbitrum nodes always double-check all the data.
AnyTrust optimistically presumes that out of all the Committee members, the majority are honest. If two members provide the same data, then it’s taken as correct.
This one is really exciting. The Arbitrum Orbit component allows you to run your own Rollup and AnyTrust chains. These chains can be either Layer 2s, meaning they’ll settle on Ethereum, or Layer 3s, letting them settle on other Layer 2s (including Arbitrum One).
This lets you get creative and build your own Arbitrum offshoots, called Orbit chains, to fulfill your blockchain dreams. This includes specific governance, tokenomics, throughput, privacy, and much more.
Another great feature for developers is Arbitrum Stylus. This tool lets you write Ethereum Virtual Machine (EVM)-compatible smart contracts in Rust and any other language, compiling to Wasm.
In short, it’s a writing tool (hence the name) for devs to write and deploy smart contracts from within Arbitrum’s tool suite. Of course, you’ll still need to know how to code–it doesn’t do everything for you.
Arbitrum’s token, $ARB, is its native ERC-20 standard governance token that allows you to help shape the future of this rollup.
The lucky early members of the Arbitrum community who played with this buzzing ecosystem received a share of the total supply of $ARB via an airdrop. Initially, the total supply for its launch was 10 billion, with a 2% yearly inflation rate.
$ARB is used as a governance token first and foremost. This means you, as an $ARB holder, get to vote on matters dealing with the chain itself, its future, and any potential changes. You can also delegate your $ARB tokens to delegates who will participate in governance votes on your behalf if you trust and align with their opinions.
As a governance token, $ARB isn’t used to pay for things like transaction fees, so you don’t have to worry about holding $ARB if you don’t want to participate in governance.
Today, the leading Ethereum Layer 2 networks are all built using rollups. The main difference between rollups is their specific approach: they either use optimistic or zero-knowledge rollups (zk-rollups).
Optimistic rollups operate under the assumption that every transaction is valid until proven otherwise, whereas zk-rollups are the opposite: they assume all transactions are false until proven valid. While optimistic rollups are faster, zk-rollups may offer enhanced privacy and security.
EVM compatibility is another important factor. Full compatibility means that there is no difference between this layer’s virtual machine and EVM. Equivalence, on the other hand, means there are some differences in the code of the two virtual machines, usually aiming to improve their speed.
When it comes to fraud proofs, or the way users can point out fraudulent transactions, Arbitrum is the only L2 in our list implementing the multi-round approach. Optimism opts for a single-round approach, and since Base implemented the same solution in partnership with Optimism, the same goes for this Layer 2 as well.
Polygon, on the other hand, uses zk-rollups which skip this step altogether by checking the validity of each transaction before they’re even processed.
Users can move funds to Etheruem L2s using a cross-chain bridge. However, increasingly, chain abstraction makes swapping tokens across chains easier. Cross-chain swaps removes the need to separately bridge funds.
Finally, tokens are another important difference. While both Arbitrum, Optimism, and Polygon have their own native tokens, ARB, OP, and POL, Base just uses ETH, with no plans to launch a separate native token.
The leading Arbitrum NFT marketplace, Magic Eden, lets you dive into the diverse and growing world of Arbitrum with a myriad of NFT collections available for minting and collecting.
Here, you can find your favorite Arbitrum NFTs and rank them by price, trading volume, number of sales, or other criteria. What’s more, you can also check out the biggest movers on the Arbitrum blockchain to see what’s really hot.
Connect your wallet to Magic Eden to dive into the world of Arbitrum NFTs!
Arbitrum improves transaction speeds and costs of the Ethereum blockchain. To do this, it takes transactions off-chain, computes them there, then sends them in batches to be settled on-chain. This makes the process under the hood faster, cheaper, and more user-friendly for you.
Arbitrum’s uniqueness lies in the combination of its underlying technology with the products from its suite. It offers a huge, yet comprehensive set of tools for developers, it’s easy to understand regardless of experience level, plus it’s fully EVM-compatible.
Arbitrum is a Layer 2 that can be used for deploying smart contracts, which means the protocol can be used for anything that’s available on Ethereum. This includes decentralized finance (DeFi) applications, NFTs, and different dApps, including games.
The Arbitrum Foundation serves to support technological advancements, enable strategic partnerships, and educate the community about Arbitrum as a whole and its ever-evolving specifics. It also offers grants and initiatives approved by the ArbitrumDAO, which is a group of $ARB holders who participate in the blockchain’s governance, but the Foundation itself is not governed by the DAO.
An Arbitrum wallet needs to support ETH, ERC-20, and ERC-721 tokens. One such example is the Magic Eden App, which is available as a browser extension and mobile app. Here, you can store any Arbitrum-related tokens, including NFTs that you can buy from the Magic Eden marketplace.
Yes, Arbitrum is considered to be secure. It uses the best parts of blockchain: it’s permissionless, leverages the decentralization of Ethereum, and employs a multi-million dollar bug program to catch potential vulnerabilities in the code.
The information provided on this website is provided for general educational purposes only and is in no way financial or investment advice. Certain information may have also been provided to us or prepared by third parties; these materials are provided for convenience and are not an endorsement by Magic Eden. Magic Eden is not liable for any errors, changes or amendments to such information, including any actions taken in reliance on such information.
