What is Arbitrum (ARB)?
Arbitrum was created by Offchain Labs - a New York-based company founded by three former university researchers with backgrounds in computer science, blockchain and cryptography. In 2021, they secured $120 million of funding and received a $1.2 billion evaluation.
Arbitrum is what you call an Optimistic Rollup protocol, which is a Layer 2 approach to increasing blockchain scalability. Arbitrum protocol offers off-chain transaction verification and processing, which takes the burden off the Ethereum mainnet. Optimistic Rollups also ensure better security than other scaling solutions by verifying transactions on the Ethereum network while storing them off-chain.
ARB, Arbitrum’s native token, was airdropped in March 2023 when 12.75% of its total supply were distributed among Arbitrum users. ARB will be used by the holders to vote on protocol-related decisions, which is part of the long-running plan of turning Arbitrum into a decentralized autonomous organization (DAO)
Arbitrum's design allows for fast and cheap funds withdrawal, allowing users to move their assets between Ethereum mainnet & Arbitrum sidechain fast and easy. By enabling faster and cheaper transactions, Arbitrum has the potential to greatly improve the usability and accessibility of decentralized applications and DeFi platforms built on Ethereum.
Why to buy Arbitrum (ARB)?
Many see Arbitrum as an interesting investment opportunity, and here is why.
Arbitrum’s strength lies in the increased speed and reduced cost of transactions it offers in comparison to the Ethereum mainnet, which can potentially drive up its usage by DeFi platforms and dApps.
Optimistic Rollups enable scalability without compromising transaction security, which is another good design decision on Arbitrum’s behalf.
Though there is a range of scaling solutions on the market, such as Polygon or Optimism, Arbitrum has shown significant growth in 2023. It currently boasts the most total value locked than any of its competitors, by far, showcasing the potential the users see in this protocol.
