Arbitrum is a layer-2 blockchain for Ethereum that uses optimistic rollups for scalability. Rollups are a type of technology that reduces the computation load of the main Ethereum blockchain (layer-1), allowing the running of smart contracts at scale while still preserving its security.
The rollup technology results in decreased gas fees and a significantly less congested Ethereum network. This is why many developers are choosing to build on Arbitrum.
The layer-2 solution is built by the New York-based company Offchain Labs. Offchain Labs is a venture-backed and Princeton-founded company. The company was valued at approximately $1.2 billion after a $100 million Series B led by Lightspeed Venture Partners.
Other known investors include Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, Alameda Research, and Mark Cuban.
What is special about Arbitrum?
Arbitrum operates as a separate layer of the network to prevent the Ethereum mainnet from clogging by facilitating the validation of smart contracts via optimistic Arbitrum rollups.
Arbitrum’s Ethereum Virtual Machine (EVM) compatibility makes it unique, allowing developers to build their dapps within the Arbitrum mainnet without learning a new coding language. It is one of the best layer-2 solutions in both security and reliability thanks to its advanced fraud-proof mechanism and its proprietary VM.