Arbitrum (ARB)

Overview

Arbitrum is an Ethereum layer-2 scaling network that helps reduce transaction costs and improve throughput for Ethereum-compatible applications. ARB is primarily used for governance within the ecosystem.

Key Features

• Speed: Fast, with Ethereum-layer settlement characteristics
• Fees: Low compared with Ethereum mainnet
• Security: High
• Consensus type: Optimistic rollup
• Smart contracts: Yes
• Ecosystem size: Large and DeFi-heavy

History & Background

Arbitrum launched in 2023, created by Offchain Labs. To scale Ethereum applications while retaining compatibility with existing tooling.

• 2021: Arbitrum mainnet launches for users and developers.
• 2023: ARB governance token launches.
• 2024: Arbitrum remains one of the largest Ethereum layer-2 ecosystems.

How It Works

Arbitrum batches transactions off-chain and posts summarized data to Ethereum, allowing users to interact with apps more cheaply while keeping strong ties to Ethereum security.

Consensus Mechanism

Arbitrum uses an optimistic rollup model in which transactions are assumed valid unless challenged during a dispute window.

Tokenomics

• Total supply: 10 billion ARB initial supply
• Circulating supply: Circulating supply depends on unlock schedules and governance distribution
• Issuance schedule: Supply follows vesting, ecosystem incentives, and governance allocation plans
• How new coins are created: Created through token allocation and ecosystem distribution
• Utility: Governance, ecosystem incentives, and network coordination

Use Cases

Strengths

• Strong Ethereum compatibility
• Large DeFi presence
• Lower transaction costs than mainnet Ethereum

Limitations

• Depends on Ethereum for final settlement
• Governance token utility is narrower than fee tokens
• Rollup bridging can still feel complex to users

Supported Networks

• Arbitrum One: Main network for ARB ecosystem usage and smart contract applications
• Ethereum: Provides the underlying settlement and security layer

How to Store It

ARB can be stored in Ethereum-compatible wallets, hardware wallets, and exchanges that support Ethereum-layer assets. Learn more on our wallets guide.