About Arbitrum (ARB)
Arbitrum is a layer-2 scaling solution designed to address the congestion issues faced by the Ethereum network. Developed by New York-based company Offchain Labs, Arbitrum focuses on improving the validation of smart contracts. By doing so, it aims to increase transaction throughput while maintaining the security of the Ethereum mainnet.
The platform employs a technique called "transaction rollups" to achieve this goal. In essence, transaction rollups involve bundling transactions and records, validating them on the layer-2 network, and then moving the data to the layer-1 mainnet – in this case, Ethereum. This process reduces congestion on the mainnet by offloading some of the computational burdens to the layer-2 network.
Arbitrum compensates nodes, known as aggregators, that actively validate smart contracts running on the Arbitrum chain. These nodes receive rewards in ETH and are responsible for adding blocks to the Ethereum mainnet.
Recently, The Arbitrum Foundation is facing criticism over its handling of the $1 billion AIP-1 proposal, with concerns about transparency and community input. AIP-1 aims to allocate ARB tokens to a foundation-controlled wallet for distribution to developers, users, and investors. However, fears of centralization and decision-making issues have prompted calls for increased transparency and community involvement in Arbitrum's governance.
Arbitrum's native token, ARB, plays a pivotal role in the platform's ecosystem. ARB serves various purposes, including securing the network, providing incentives, and facilitating transactions. The live price of ARB is available and updated on Binance.