What is Arbitrum (ARB)?

Deep Dive

1. Purpose & Value Proposition

Arbitrum exists to solve Ethereum's scalability trilemma—balancing security, decentralization, and scalability. Its core value is enabling faster, cheaper transactions for decentralized applications (dApps) like DeFi protocols and NFT marketplaces, while inheriting Ethereum's robust security. This makes advanced blockchain applications practical for everyday users by drastically reducing gas fees and wait times.

2. Technology & Architecture

Arbitrum is an Optimistic Rollup. It works by executing transactions off-chain in batches, then posting a cryptographic summary (or "proof") to the Ethereum mainnet. The "optimistic" name comes from its security model: it assumes transactions are valid unless challenged within a dispute window (typically 7 days). This design provides high throughput and low costs while relying on Ethereum for final settlement and censorship resistance. Its full compatibility with the Ethereum Virtual Machine (EVM) means developers can easily port their existing Ethereum smart contracts to Arbitrum with minimal changes.

3. Tokenomics & Governance

The ARB token has a fixed total supply of 10 billion and is purely a governance token. Unlike many other networks, gas fees on Arbitrum are paid in ETH, not ARB (Metalmind). This intentional design separates network usage from governance, insulating users from token volatility. ARB holders vote on proposals through the Arbitrum DAO, deciding on protocol upgrades, treasury allocations (which holds billions of ARB), and ecosystem grants, making it a cornerstone of the network's decentralized future.

Conclusion

Fundamentally, Arbitrum is Ethereum's high-performance scaling layer, and ARB is the key that gives its community control over that layer's evolution. How will its governance model adapt as the ecosystem continues to expand?