An Overview of Arbitrum, the Largest Layer 2 Blockchain
Ethereum is the first, and largest smart contract blockchain, however, it does hit a few bumps when it comes to handling lots of transactions. As crypto adoption grows, those delays and high fees are not ideal for anyone.
That's where Arbitrum comes in! Designed specifically to tackle these hurdles, Arbitrum aims to scale the Ethereum network: making it faster, more cost-effective, and safer for investors.
Ready to dive in and discover Arbitrum? Let's explore what makes Arbitrum unique and why it's making waves in the world of cryptocurrency!
What is Arbitrum?
Arbitrum is a Layer 2 solution, which means it’s a technology designed to scale Ethereum. It does this through a method called optimistic rollups.
Here's how it works: transactions on Arbitrum are processed off the Ethereum mainnet to lower cost and improve speed. They are then confirmed on the blockchain, taking advantage of the security and decentralization benefits of Ethereum. This is what allows OpenWorld to optimize liquidity pool portfolios and offer them to users for low fees.
As an optimistic rollup, Arbitrum has some unique key features, including:
Scalability: Transactions on Arbitrum are 10-100x faster and much cheaper than on Ethereum.
Inherited Security: Transactions are validated and stored on Ethereum, so Arbitrum benefits from Ethereum's decentralization and security.
EVM Compatibility: As a rollup, Arbitrum has high EVM compatibility, making it easy for Ethereum developers to build on Arbitrum. Offchain Labs, the original developers of Arbitrum, also extended the EVM into EVM+ to support more languages like Rust and C++.
Arbitrum Network
To scale crypto even faster, Arbitrum also developed various networks, which are optimized for various use cases. Let's take a quick look at the current Arbitrum networks:
Arbitrum One: This network hosts a variety of ecosystems including DeFi, gaming, NFTs, and infrastructure. It features notable projects such as Uniswap, Chainlink, AAVE, GMX, and more.
Arbitrum Nova: This newer chain is particularly focused on gaming and NFTs, and focused on increased speed. Early adopters of this chain include SushiSwap and Archly Finance.
Arbitrum Orbit: Designed as a suite of customizable Layer 3 chains for developers, Orbit includes innovations like the gaming-focused chain Xai, which utilizes Orbit technology to target maximum speed.
Arbitrum vs. Other Layer 2s: What’s the difference
There are dozens of Layer 2 blockchains, such as Arbitrum, Base, and Optimism. Arbitrum is the largest Layer 2 by total value locked (TVL), which reflects the large number of users and its thriving ecosystem. The large ecosystem and low cost enable crypto companies like OpenWorld to create financial solutions that offer lower costs and higher returns than on other blockchains.
Similar to why more people use X/Twitter vs. Threads, much of the value in a blockchain, comes from the benefits of having more people using the blockchain. The more users and TVL that a blockchain can attract, the more it attracts developers and builders to create in the blockchain.
Arbitrum Community
Arbitrum isn't just about technology; it's a lively community where people come together to share their passion for DeFi and blockchain innovation.
From seasoned investors to degens, Arbitrum welcomes everyone. It's a place where you'll find a unique mix of individuals—some deeply knowledgeable about blockchain and others just starting out. This diversity makes for an open and engaging atmosphere where learning and sharing happen naturally.
But it's not all serious business. The community also loves to have fun. Memes and jokes about crypto trends and projects are part of everyday conversation, adding a touch of humor to discussions. This playful side helps build connections and makes the community feel like a tight-knit group of friends.
Uniting everyone is a shared belief in decentralization—the idea that everyone should have more control over their financial choices. This belief drives the community forward, inspiring them to explore new ideas and work towards a future where financial systems are more inclusive and fair.
Conclusion
As Ethereum deals with challenges that can limit its usability, Arbitrum has stepped up as a promising solution. Backed by a strong team and a supportive ecosystem, Arbitrum is emerging as the top Layer 2 solution— as measured by users and TVL.
That said, it's important to remember that Layer 2 technology is still in its early stages. While the potential is thrilling, we need to proceed thoughtfully because advancements come fast.
OpenWorld plans on building on Arbitrum to take advantage of its world-class security and scalability, large user base, and ease of use. We bring the best DeFi assets on Arbitrum to users, and we are constantly researching ways to bring the best investment solutions across all of crypto to users.
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