Introduction
Arbitrum is a Layer 2 scaling solution for Ethereum, designed to enhance the network’s scalability and reduce transaction fees. Utilizing Optimistic Rollups, Arbitrum processes transactions off-chain while maintaining the security guarantees of Ethereum’s Layer 1. Since its launch, Arbitrum has gained significant traction due to its efficient transaction processing and compatibility with Ethereum’s existing infrastructure.
Supported Layer 1 Blockchains
Arbitrum primarily supports Ethereum as its underlying Layer 1 blockchain. It interacts with Ethereum to secure transactions processed off-chain and to provide a seamless experience for Ethereum-based decentralized applications (dApps).
Properties Compared to Competitors
| Property | Arbitrum | Optimism | Polygon | zkSync |
|---|---|---|---|---|
| Consensus Mechanism | Optimistic Rollup | Optimistic Rollup | Proof of Stake + Plasma | zk-Rollup |
| Transaction Speed | ~40,000 TPS | ~4,000 TPS | ~7,000 TPS | ~2,000 TPS |
| Finality Time | ~10 minutes | ~10 minutes | ~2-5 minutes | ~10 minutes |
| Language Support | Solidity, Vyper | Solidity, Vyper | Solidity, Vyper | Solidity, Vyper |
| Energy Efficiency | ~0.1 kWh/transaction | ~0.1 kWh/transaction | ~0.2 kWh/transaction | ~0.1 kWh/transaction |
Performance Compared to Competitors
| Metric | Arbitrum | Optimism | Polygon | zkSync |
|---|---|---|---|---|
| Transaction Fees (USD) | ~$0.10 | ~$0.15 | ~$0.02 | ~$0.05 |
| Total Value Locked (TVL) | ~$5.5 Billion | ~$1.8 Billion | ~$2.3 Billion | ~$500 Million |
| Transaction Volume | ~1 Million/day | ~500,000/day | ~3 Million/day | ~200,000/day |
| Active Addresses | ~2 Million | ~500,000 | ~3 Million | ~100,000 |
| Smart Contracts Deployed | ~100,000 | ~30,000 | ~200,000 | ~20,000 |
| Hash Rate | N/A (Layer 2) | N/A (Layer 2) | N/A (Layer 2) | N/A (Layer 2) |
| Staking Participation | N/A (No staking) | N/A (No staking) | ~30,000 validators | N/A (No staking) |
Tokenomics
- Total Supply: 10 Billion ARB
- Current Circulating Supply: 1.275 Billion ARB
- Emission Rate: Linear release over 10 years
- Token Utility: ARB tokens are used for governance, paying transaction fees on the Arbitrum network, and participating in staking (future plans).
Main Investors
| Investor | Token Holdings (ARB) | Percentage of Total Supply |
|---|---|---|
| Andreessen Horowitz (a16z) | 500 Million | 5% |
| Polychain Capital | 300 Million | 3% |
| Paradigm | 200 Million | 2% |
Founders and History
Arbitrum was founded by Steven Goldfeder, Harry Kalodner, and Ed Felten in 2020 as part of their company, Offchain Labs. The project was incubated at Princeton University, where the founders aimed to solve Ethereum’s scalability issues through Layer 2 technology. Arbitrum launched its mainnet in September 2021 and quickly became one of the most popular Ethereum Layer 2 solutions, securing significant partnerships and investments from major players in the crypto space.
Invest Alpha 