Arbitrum is a scaling solution that provides an in-memory database for transparent, real-time P2P payments. Arbitrum’s network consists of thousands of nodes distributed across the world, making it ideal for global transactions.
Arbitrum may have surpassed Ethereum in terms of total transactions processed, but this doesn’t mean that it is the better chain. Some people believe that Ethereum’s smart contract capabilities make it a better platform for building applications on top of. Others believe that Arbitrum’s faster transaction speed and lower fees are more important factors in determining which chain is best. It will be interesting to see which chain prevails in the long run.
Arbitrum is a key player in Ethereum’s scaling solution arsenal, with 54% of the market share and $3.38 billion locked in escrow contracts. The platform has seen a surge in popularity recently due to its low transaction costs and quick processing times. This may be reason enough for investors to keep an eye on Arbitrum, especially as the TVL value reaches its highest point since May 2022.
Many L2 scaling solutions, like Arbitrum, Optimism, Immutable X and StarkWare, are built on top of layer-1 blockchains like Ethereum. However, these L2s function in a faster, cheaper way and reduce the load on L1s by bundling up transactions and only recording final results on the main blockchain. This way it doesn’t clog up the network.
