// GLOSSARY -- BLOCKCHAIN & CRYPTO FUNDAMENTALS

What is Arbitrum?

1 min read Updated

Arbitrum is an Ethereum Layer 2 optimistic rollup that provides faster, cheaper transactions while inheriting Ethereum's security — currently the largest L2 by total value locked.

WHY IT MATTERS

Arbitrum was one of the first L2s to achieve significant adoption. Built by Offchain Labs, it uses optimistic rollup technology to batch transactions off-chain and post compressed data to Ethereum. The result: 10-50x cheaper transactions with near-instant confirmation.

Arbitrum's ecosystem includes Arbitrum One (the main rollup), Arbitrum Nova (for gaming and social, using AnyTrust), and Arbitrum Orbit (for launching custom L3 chains). The ARB governance token enables community governance.

With billions in TVL and hundreds of deployed protocols, Arbitrum demonstrates that L2 scaling works in practice — not just theory. Major DeFi protocols (GMX, Camelot, Radiant) have launched natively on Arbitrum.

FREQUENTLY ASKED QUESTIONS

How much cheaper is Arbitrum?
Typically 10-50x cheaper than Ethereum L1. A simple transfer costs fractions of a cent. Complex DeFi operations cost pennies instead of dollars.
How long do withdrawals take?
As an optimistic rollup, native withdrawals to Ethereum take ~7 days (the challenge period). Third-party bridges offer faster withdrawals for a fee.
Arbitrum vs Base?
Both are optimistic rollups. Arbitrum has larger TVL and more native DeFi. Base has Coinbase's distribution and brand. The ecosystems are converging as apps deploy multi-chain.

FURTHER READING

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