Hy my friends,

today I had a little research about Arbitrum, and wanted to share with you what I learned about this wonderful system.

As they say in their Whitepaper, Arbitrum is a brand-new scaling solution that will reduce fees, increasing interoperability, scalability, security and anti-fraud.

Let's dive right into the topic! You'll be amazed! ;) 

What you'll learn today

• Arbitrum is an innovative, cost-effective, and efficient solution for the second layer of the Ethereum blockchain.
• The key points of the system are: interoperability, scalability, privacy, security, and anti-fraud guarantee
• You can create, edit and manage dApps in a simple, intuitive, and cost-effective way, with fees reduced by up to 50 times compared to normal

After numerous updates within the Ethereum blockchain, Arbitrum stands out as the latest layer 2 of Ethereum. In simple terms, it is a system that can manage and support smart contracts in an unlimited way in terms of scalability, increasing the level of privacy and security.

Just as on Ethereum, Arbitrum allows you to create groups of smart contracts through specific codes, which make a virtual machine (VM) move at will. In this way, the usability and intuitiveness of the system are greatly increased.

Below, we will try to explain in basic terms how this update, which is attracting the interest of thousands of users, works.

Arbitrum: the new solution for the Ethereum blockchain

The main mechanism of Arbitrum's operation, as we mentioned above, is the use of commands and the way they are delivered to the VM system. In a nutshell, the users agree off-chain on what is to be executed by the VM, so that the miners only have to verify the signatures, saving time and energy.

If in some cases, there are problems with the decisions to be made, the various groups can still support each other on the on-chain to modify the behavior of the VM. Logically, it will not be possible to misrepresent or give orders that have not been previously decided, as miners can identify and penalize those who do so through their own protocols.

In this sense, Arbitrum already stands out as a very secure and reliable solution, as it not only significantly increases the level of privacy, but also scalability. Among other things, the system uses the reliable Optimistic Rollup mechanism, also known as Optimism.

Optimism enables transactions to be processed much faster, minimizing the commission costs for executing a smart contract. This preserves the experience for developers, who will not need to modify tools, APIs, and smart contracts while improving the user experience.

In addition, Arbitrum uses multi-layered anti-fraud mechanisms that can detect suspicious transactions on layer 2, unlike Optimism which runs single rounds, further optimizing the anti-fraud process.

So, as mentioned in their whitepaper, Arbitrum has four strengths: scalability, privacy, guarantee by AnyTrust, and interoperability with Ethereum. No other solution within decentralized finance combines these advantages.

Translated with www.DeepL.com/Translator (free version)

Can dApps be started on Arbitrum?

As with other DeFi protocols and platforms, Arbitrum allows dApps to be started easily and intuitively. This process is, of course, mainly aimed at developers. For instance, if you have developed a decentralized application and want to run it on Ethereum, you will have to operate according to certain criteria.

First of all, you have to take into account that Arbitrum operates on Ethereum, which may not be very scalable and may be very expensive. By exploiting the interoperability between the two systems, however, you can achieve a higher level of scalability, maximizing privacy and security at the same time.

So, if you have already developed it, you can simply move the dApp from Ethereum to Arbitrum to increase its efficiency. If, on the other hand, you are starting to write your own dApp, perhaps using Solidity, then you will need to do the following:

First of all, you will need to compile the various Solidity contracts, which can be done via the compilation tool offered by Arbitrum itself. Then, the system will create smart contracts that can be executed via Truffl, for example.

Having done this, you will have to identify the validators who, in turn, will keep track of your dApp, ensuring its correct functioning and its levels of security and scalability.

Validators, of course, can be random individuals, but they can be chosen by the dApp developer himself. Ideally, you should have a team of experts on hand to ensure that your application runs smoothly.

Finally, you can decide on the design of your dApps with the help of so-called observers, i.e. users who will see everything you do in the app and give you suggestions or opinions on certain aspects. Obviously, observers are not responsible for the correct functioning of the dApp on Arbitrum.

Is there a native Arbitrum token?

As this is a completely new system, many users think that Arbitrum will deliver its own native token that can be used within dApps and various protocols. However, the team behind Arbitrum has not made any official announcement about the release of a token.

There are, however, several pages and groups advertising the company's release of a new coin. Be very careful with these types of channels, as they have proven to be outright scams that have caused some investors to lose large amounts of money.

As long as there is no communication from the official channels, the only token that remains anchored in the development of Arbitrum is Chainlink (LINK). This is not, of course, a real anchor like stablecoins with the dollar, but the fact that the strong partnership between Arbitrum and Chainlink has marked strong rises in the price of the second currency.

How will Arbitrum deal with Uniswap?

As far as the future of Arbitrum on the Uniswap exchange is concerned, the intentions seem to be very positive. Since this is a layer 2 scaling solution, the Arbitrum developers themselves proposed to Uniswap that they move the V3 version of the AMM to their system.

Since this is a scalable, secure, and very cost-effective solution, the Uniswap team did not immediately refuse the proposal but conducted a survey with their community to understand their opinions. The results were very impressive.

Unlike many polls where you see very similar results between the two factions, this one got 100% of the votes in favor of Arbitrum. Needless to say, this will bring numerous innovations to the world of DeFi and Uniswap, which are often shunned due to the exaggerated gas fees of the Ethereum blockchain.

Is Arbitrum already available?

The Arbitrum mainnet was officially launched on 28 May 2021, giving space to over 250 teams of developers who submitted their projects. As announced within the Medium article posted by the team, equal priority will be given to each group of developers until there is a wide choice of usable projects.

Obviously, the process will take some time, given the high number of submissions, but the Arbitrum team seems very positive about it, as it will provide just as much time for developers to create their projects.

Arbitrum's mainnet is called Arbitrum One, and has a ChainID numbered as follows: 0xa4b1 (decimal: 42161).

This will be used to connect to the main network, within which you can develop your projects. The blockchain is supported not only by giants such as Etherscan, but also by Alchemy, the industry leader in network management.

In terms of fees to pay, Arbitrum's solution boasts the ability to save up to 50 times the cost of commissions per transaction. This means that where you would normally have to pay 0.1 ETH per trade, you will now pay 0.05 ETH. It is precisely for this reason that a project like Arbitrum has caught the attention of many investors, who see it as one of the gems of the moment.

At the moment, the openings are only available to developers, but the team will be making official announcements, which can be followed on Discord and Twitter.

If you want to read the whitepaper, you can find it here. If you would like more information about the fees, click here.

Conclusions

Arbitrum seems to be a really good project, which aims to be one of the first to guarantee not only security but also privacy, scalability, and anti-fraud guarantee. This is a big step within the Ethereum network and could bring numerous innovations for all users.

Obviously, it will take some time before the developers can achieve the desired results, but the intentions seem to be very positive, given the solid community behind it.

Combining Arbitrum with protocols such as Uniswap and other AMMs could drastically reduce the fees to be paid, and considerably increase the number of users.

As always, I advise you to stay up to date so you don't miss out on any important projects!

*This article will be published on theledger.it in the Italian language following our schedule, and was translated to share my knowledge with you :) Give it a look if you want to support us :) 

Liked the post? Share your opinion below in the comment and let me know if you want me to add something else about Arbitrum!

Also, I suggest you watching their YouTube video to grasp the potential of this project :) -->https://www.youtube.com/watch?v=JT53VYIujHI