What Is Arbitrum (ARB)?

The world of blockchain is rapidly evolving, with new technologies being developed to solve challenges like scalability, high fees, and transaction speed. One of the most popular solutions in this space is Arbitrum (ARB) — a Layer 2 scaling solution built on top of Ethereum.

1. Understanding Arbitrum

Arbitrum is a Layer 2 blockchain that helps Ethereum process transactions faster and at a lower cost. Instead of executing every transaction directly on the Ethereum mainnet, Arbitrum uses a technology called rollups to bundle multiple transactions together, then submits them to Ethereum as a single batch. This makes the network more efficient while maintaining Ethereum’s security.

2. Why Arbitrum Matters

Ethereum is the most widely used blockchain for decentralized applications (dApps), but it often faces problems like:

High Gas Fees during network congestion.

Slow Transaction Speed compared to newer blockchains.

Arbitrum addresses these issues by:

Reducing gas fees by up to 90%.

Allowing faster and smoother dApp experiences.

Supporting popular DeFi, NFT, and gaming projects.

3. The ARB Token

In March 2023, Arbitrum launched its native governance token, ARB. The ARB token is mainly used for:

Governance: Holders can vote on proposals that shape the future of the Arbitrum network.

Ecosystem Growth: ARB tokens help fund and support projects within the Arbitrum ecosystem.

Unlike Ethereum’s ETH, ARB is not required to pay gas fees on the network. Instead, transaction fees are still paid in ETH, which keeps Arbitrum tied closely to the Ethereum ecosystem.

4. Arbitrum’s Ecosystem

Arbitrum has quickly become one of the most active Layer 2 solutions, hosting dozens of decentralized exchanges (DEXs), lending platforms, NFT marketplaces, and blockchain games. Popular projects like Uniswap, Aave, and GMX run on Arbitrum to offer cheaper and faster user experiences.

5. The Future of Arbitrum

As Ethereum continues its transition to becoming more scalable through upgrades like