Overview
Arbitrum is an Ethereum Layer 2 scaling solution using optimistic rollups to deliver fast, low-cost transactions while inheriting Ethereum's security. Launched in August 2021, it became one of the largest L2s by total value locked and daily users. Its native token is ARB, and it is developed by Offchain Labs.
How It Works
Arbitrum executes transactions off-chain on its own chain and posts compressed transaction data to Ethereum, trusting that batches are valid unless challenged. Its fraud-proof system, originally based on interactive dispute resolution, ensures that invalid state transitions can be caught and reverted. Users bridge assets from Ethereum and transact at a fraction of the base-layer cost.
Why It Matters
Arbitrum's EVM compatibility and low fees made it the default home for many DeFi protocols migrating from Ethereum. Its AnyTrust technology further reduces costs by relaxing data availability assumptions for less critical chains. As of 2026 it is a benchmark L2, and its security and fee trade-offs are representative of the optimistic rollup category.
Related Concepts
Arbitrum is an Optimistic Rollup within the Rollup family, relying on Fraud Proofs. It connects to Ethereum via Bridges and is part of the Layer 2 landscape along with Optimism, Base, and the ZK-rollup projects.