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Understanding ARB Coin: The Native Token of Arbitrum
Introduction to Arbitrum
Arbitrum is one of the most prominent Layer 2 scaling solutions for Ethereum, designed to improve transaction throughput and reduce gas fees without compromising on Ethereum’s security. Developed by Offchain Labs, Arbitrum uses a technology called Optimistic Rollups, which bundles multiple transactions into a single one and settles it on Ethereum.
What is ARB Coin?
ARB is the native governance token of the Arbitrum network. It was launched in March 2023 through an airdrop to early users and developers. Unlike ETH (which is used to pay for gas fees on Arbitrum), ARB is primarily used for governance, allowing holders to participate in decision-making via the Arbitrum DAO.
Key Features of ARB Coin
1. Governance Power: ARB holders can vote on key upgrades and proposals through the DAO.
2. Decentralized Control: The Arbitrum DAO manages critical aspects of the protocol, ensuring community-driven growth.
3. Non-Monetary Utility: ARB is not directly used for gas fees, setting it apart from utility tokens.
4. Fixed Supply: ARB has a fixed supply cap of 10 billion tokens.
Recent Developments
Since its launch, ARB has seen widespread adoption, especially as Arbitrum continues to lead the Layer 2 space in total value locked (TVL). Arbitrum Orbit and Stylus have also expanded the ecosystem, allowing custom chains and WASM smart contracts, respectively.
Risks and Considerations
Market Volatility: Like other crypto assets, ARB is subject to price fluctuations.
Governance Centralization: Although governed by a DAO, large holders may exert disproportionate influence.
Conclusion
ARB coin represents a new frontier in decentralized governance on Layer 2 networks. With Arbitrum’s growing ecosystem and commitment to scalability, ARB continues to play a central
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