Arbitrum (ARB) Complete Guide: Layer 2 Solution Leading Ethereum's Scalability Innovation
Introducing Arbitrum (ARB)
Arbitrum is an innovative layer 2 solution created to solve Ethereum's 'scalability triangle' problem. It operates on the Ethereum blockchain, but the transaction speed is 10-100 times faster, and the fees are reduced by more than 90%.
Think about it. Have you ever paid over 50,000 won in gas fees for a simple token transfer on Ethereum? With Arbitrum, you can process the same transaction for a few hundred to a few thousand won. This is Arbitrum's biggest appeal.
Arbitrum's utilization is rapidly increasing, especially in the DeFi (decentralized finance) and NFT fields. Major DeFi protocols such as Uniswap, Abe, and Curve are deployed on Arbitrum to provide users with a better experience.
Arbitrum's Birth and Development History
Arbitrum's history began at Princeton University in 2018. It began when Professors Harry Kalodner, Steven Goldfeder, and Ed Felten studied solutions to Ethereum's scalability problems.
In May 2021, the Arbitrum One mainnet was finally launched. It has received explosive interest since its launch, and its TVL (Total Value Locked) has surpassed several billion dollars in just a few months.
In March 2023, the Arbitrum Foundation airdropped the ARB governance token, marking a major milestone on the way to full decentralization. This airdrop was a massive event, with approximately 1.2 billion ARB tokens, equivalent to 12.75% of the total supply, distributed to 620,000 users.
• 2019: Arbitrum Rollup Technical Paper Release
• 2021: Mainnet Beta Launch
• 2022: Arbitrum Nova Launch
• 2023: ARB token launch and full decentralization
• 2024: Arbitrum Stylus in development
Arbitrum's innovative working principle
Arbitrum's core technology is 'Optimistic Rollup'. The name may seem complicated, but the concept is surprisingly simple.
Rollup technology principle: Hundreds of transactions are bundled into a single 'batch' and recorded on the Ethereum mainnet at once. It's like a delivery company putting multiple packages on a single truck and delivering them.
Meaning of 'Optimistic': All transactions are basically processed assuming they are valid. If someone finds a fraudulent transaction, there is a system to challenge it within 7 days.
| Classification | Ethereum | Arbitrum |
|---|---|---|
| Transaction speed | 15 TPS | 4,000+ TPS |
| Average gas fee | $20-100 | $0.1-2 |
| Confirmed Time | 13-15 seconds | 1-2 seconds |
| Security | Ethereum consensus | Same as Ethereum |
Another innovation of Arbitrum is its full compatibility with EVM (Ethereum Virtual Machine). Developers can deploy existing Ethereum code to Arbitrum with little modification, which allows the ecosystem to expand very quickly.
A variety of applications of Arbitrum
Arbitrum's application scope is truly extensive. Let's take a look at the most active areas currently:
Decentralized Finance (DeFi): This is the area that accounts for the largest proportion of Arbitrum. Let's take a look at the representative protocols:
- Uniswap V3: The largest DEX on Arbitrum
- AAVE: A leader in lending/savings protocols
- Curve: A stablecoin-focused DEX
- GMX: Arbitrum's native derivatives exchange
NFT Marketplace: NFT trading, which was limited due to high Ethereum gas fees, is now thriving on Arbitrum:
- OpenSea Arbitrum Support
- Treasure - Arbitrum Native NFT Game Ecosystem
- Stratos - Arbitrum-based Metaverse Project
Game & Metaverse: Blockchain games require frequent transactions, and Arbitrum's low fees are the perfect solution.
Major exchanges where Arbitrum can be traded
ARB tokens have been listed on major exchanges around the world and are actively traded since their launch:
Major overseas exchanges:
- Binance: Largest trading volume in the world, offers a variety of trading pairs
- Coinbase: Largest exchange in the US, preferred by institutional investors
- Huobi: Strong in Asia, active futures trading
- Kraken: Focused on Europe, high security
- OKX: Specialized in derivatives trading
Current status of domestic exchanges: Not yet listed on major domestic exchanges (Upbit, Bithumb, Coinone), but can be traded through global exchanges. There is a lot of interest in the possibility of future listing.
- Compare trading fees and deposit/withdrawal fees
- Check trading volume and liquidity
- Security and insurance coverage
- Quality of customer service
- Regulatory compliance
Active Arbitrum community and ecosystem
Arbitrum has a very active developer and user community worldwide. This is a critical element in ensuring the long-term success of the project.
Official Community Channels:
- Arbitrum Foundation Official Forum: Governance proposals and technical discussions
- Discord: Real-time developer support and community communication
- Telegram: Real-time sharing of news and announcements
- Twitter: Latest updates and partnership news
- Reddit: User experience sharing and technical discussions
Developer Ecosystem: Arbitrum is known for its developer-friendly environment. New projects are constantly being born through regular hackathons, grant programs, and technical workshops.
As of 2024, there are over 400 dApps running in the Arbitrum ecosystem, with over 500,000 daily active users, the highest among layer 2 solutions.
Wallet Guide for Safe Arbitrum Management
Choosing the right wallet is essential to safely use Arbitrum and store your ARB tokens. Fortunately, Arbitrum is fully compatible with Ethereum, so you can use your existing Ethereum wallet as is.
Recommended wallet options:
1. MetaMask: The most widely used web3 wallet, easy to add Arbitrum Network. Supports both browser extensions and mobile apps.
2. Trust Wallet: A mobile-centric wallet with an intuitive UI and a variety of DeFi protocol integrations.
3. Ledger Hardware Wallet: The safest choice for storing large amounts of ARB tokens. It can be used in conjunction with MetaMask.
• Network Name: Arbitrum One
• RPC URL: https://arb1.arbitrum.io/rpc
• Chain ID: 42161
• Currency Symbol: ETH
• Block Explorer: https://arbiscan.io/
Wallet Security Tips:
- Back up your private key and seed phrase in a safe place
- Beware of phishing sites (always check the official URL)
- Reconfirm the address and amount before trading
- Conduct a test transaction first when trading in large quantities
Things to consider when investing in Arbitrum
If you are considering investing in ARB tokens, please carefully review the following:
- Layer 2 competition intensifies: There are many strong competitors such as Polygon, Optimism, and Starknet.
- Ethereum dependency: Directly affected by the success or failure of Ethereum.
- Technical risks: There are technical limitations such as the 7-day withdrawal delay of Optimistic Rollup.
- Regulatory uncertainty: Regulatory policies for Layer 2 solutions are not yet clear.
- Token supply schedule: Additional token unlocks are planned in the coming years, which may affect the price.
Pre-investment checklist:
- Monitoring TVL and daily active users of the Arbitrum ecosystem
- Understanding the migration status of major dApps to Arbitrum
- Comparing performance and adoption rates with competing layer 2 solutions
- Analyzing the impact of the Ethereum 2.0 upgrade on layer 2
- Reviewing Arbitrum's future technology roadmap
Portfolio Management Principles:
ARB has innovative technology and a strong ecosystem, but it is still an asset with high volatility. It is advisable to start with 5-10% of the total portfolio and gradually adjust as the project progresses.
Conclusion
Arbitrum is one of the most promising solutions to solve the scalability problem of blockchain technology. However, in the rapidly changing cryptocurrency market, a cautious approach is always necessary. We hope that you will make wise investment decisions through sufficient learning and research, and that Arbitrum will be a good companion for you on your blockchain journey!