Daniel Esu
5 min readFeb 22



Before talking about the blockchain and the promises it comes with, let’s first take a look at what Arbitrum is.


Arbitrum is a layer 2 solution designed to improve the capabilities of Ethereum smart contracts — boosting their speed and scalability, while adding in additional privacy features to boot…..the platform is therefore designed to enable developers to easily run unmodified Ethereum Virtual Machine (EVM) contracts and Ethereum transactions on a second layer, while still benefiting from Ethereum's excellent layer 1 security(layer 1 is the fundamental base of a blockchain platform).

The Arbitrum blockchain is structured to address the inadequacies of recent Ethereum-based smart contracts which might include poor efficiency and high execution costs: which have damaged Ethereum user(s) experience and frequently making transactions an unaffordable or expensive task.

Arbitrum uses a technique called transaction summations or rollups to record batches of submitted transactions on the Ethereum main chain and execute them on a cheap, scalable layer 2 sidechain while also exploiting Ethereum to ensure correct/accurate results.

This process helps to:

★ offload the most of the computational and storage burden Ethereum currently undergoes.
★ enabling new classes of powerful layer 2(secondary framework or protocol that is built on top of an existing blockchain system) - based DApps.

A New York-based development firm known as Offchain Labs raised the sum of $120 million to fix Ethereum's deficiencies with its Arbitrum product as well as an entire suite if scaling solutions on August 31, 2021. This movement was initiated by Offchain Labs co-founders Ed Felten, Steven Goldfeder and Harry Kalodner.

Looking into their respective nest of experiences, Ed Felten is a professor; Steven Goldfeder received his Ph.D, and Harry Kalodner is a Ph.D candidate at Princeton University. All three are blockchain experts with passion for making digital currencies more capable.

Having gotten all the above information, let's take a look at how the blockchain works:


Arbitrum is a type of technology known as an optmistic rollup. It permits Ethereum smart contracts to scale by passing messages between smart contracts on the Ethereum main chain and those on the Arbitrum second layer. Larger part of the transaction processing is completed on the second layer and the results of this are recorded on the main chain - drastically improving speed and efficiency.

The system is optimistic in the sense that any validator is able to post a rollup block and confirm the validity of other blocks, while the term rollup is used to describe how public information can be used to reconstruct a complete history of the chain from an optimized log of events. The Arbitrum protocol ensures that code will run correctly (i.e. as intended) so long as any validator is honest, helping the network resist collusion and other forms of attack.

It is believed that future versions of Arbitrum will also have two other modes: channels and AnyTrust sidechains, but for the meantime, let's focus on what we have at present.

As the case is with many other blockchains, individual nodes can choose to participate in the Arbitrum chain. Validators nodes are involved in observing the state of the side chain, and full nodes aids to aggregate layer 1 transactions. Aggregators that submit transactions to the layer 1 earn their rewards paid in ETH, while the rest of the user transaction fees are apportioned to other network participants - such as validators.

Arbitrum introduces a challenge step for rollup blocks, which sees other validatorscheck the correctness of a block and issue a challenge if they believe it is wrong(customer's feedbacks considered). If the block is proven to be incorrect or a challenge is proven unjustified, the lying validator will have their stake confiscated, ensuring validators always play fair or risk the consequences.

The platform also has its own custom virtual machine, suitably named the Arbitrum Virtual Machine(AVM). This is the execution environment for Arbitrum smart contracts and exists above the EthBridge(the set of smart contracts that interfaces with the Arbitrum chain). Ethereum-compatible smart contracts are automatically translated to run on the AVM.


The system is designed to provide an easy-to-use platform with which developers can use to launch highly efficient and scalable Ethereum-compatible smart contracts.

Several platforms has attempted to overcome Ethereum's limitations; so Arbitrum isn't the first to offer similar functionality. So, what makes Arbitrum different from others? The system has several distinguishing characteristics which includes:

High Ethereum Virtual Machine(EVM)

Arbitrum is considered to be one of the most EVM-compatible rollups. It’s compatible with the EVM at the bytecode level, and any language that can compile to EVM works out of the box — such as Solidity and Vyper.

This makes it easy to develop on, since developers do not need to get to grips with a new language before building on Arbitrum.

Robust Developer Tooling

The core team behind Arbitrum are doing all they can to shorten barriers to entry when it comes to building on their layer 2 solution. As such, they have produced comprehensive developer documentation for Arbitrum, and the developers can get started using existing tooling for Ethereum. There is no need to download anything specific to Arbitrum, such as plugins, or compilers like Hardhat or Truffle; isn't this amazing?!

Low Fees

As a layer 2 scaling solution for Ethereum, the system isn’t just designed to boost Ethereum’s transactional throughput, it also minimizes transaction fees at the same time.

Thanks to its extremely efficient rollup technology, Arbitrum is able to cut fees down to just a tiny fraction of what they are on Ethereum, while still providing sufficient incentives for validators.

Fairly Launched

Arbitrum has run several testnets since October, and is currently live on mainnet for developers. Unlike many other layer 2 scaling solutions, Arbitrum doesn't have its own native utility token — hence there was no token sale.

Moreover, all interested developers took time to get up and running before Arbitrum was opened to the masses; Arbitrum gave its 250+ development teams that applied to build on the developer mainnet two full weeks of development time before Arbitrum One was opened to everyone.

Well-developed Ecosystem

Arbitrum has already worked with a wide variety of Ethereum DApps and infrastructure projects including the likes of Uniswap, DODO, Sushi and many others.

In conclusion, we can see that Arbitrum has in its possession more appealing features than other blockchains and this has in return endeared it to many developers to pick it as their first choice ahead of others.