Arbitrum (ARB) is an Ethereum Layer 2 network that processes transactions faster and more cheaply, and ARB is its governance token. Ethereum's base layer (L1) is highly secure but fees rise when it is congested; Arbitrum batches transactions off the base layer and records only the results on Ethereum.
Arbitrum relies on Ethereum for security, aiming to keep Ethereum-level safety at a lower cost. Arbitrum was developed by the US company Offchain Labs, and today the Arbitrum Foundation and the Arbitrum DAO help run the ecosystem.
Arbitrum uses an optimistic rollup design. Arbitrum posts many transactions to Ethereum in batches, assumes they are valid so they can be processed quickly, and lets anyone challenge suspected fraud with a fraud proof so errors can be corrected.
Because Arbitrum does not verify each transaction individually on the Ethereum base layer, user fees are generally lower than on L1. Arbitrum's actual fees still vary with Ethereum data costs and network congestion.
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Arbitrum has been one of the leading Ethereum Layer 2s by total value locked (TVL), hosting many DeFi, gaming and real-world asset tokenization projects. Arbitrum highlights developer tools such as the Nitro execution environment, introduced in August 2022, and Stylus, which reached mainnet in September 2024 and lets developers write smart contracts in Rust or C++ (per the Arbitrum docs).
Arbitrum treats the size of its ecosystem as a key strength in the Layer 2 race. Layer 2 TVL rankings, however, shift over time and differ between trackers such as L2BEAT and DefiLlama.
ARB is not a gas token; it is Arbitrum's governance token, and gas on Arbitrum is paid in ETH. ARB holders use the Arbitrum DAO to vote on, or delegate votes for, proposals covering treasury spending, technical upgrades and ecosystem funding.
ARB launched with an airdrop in March 2023 and has a maximum supply of 10 billion tokens, per the Arbitrum Foundation docs. ARB's role as a voting token is also the starting point for debate over how network usage connects to ARB's value.
Arbitrum's roadmap focuses on decentralization and expansion. According to the Arbitrum Foundation, BoLD, which lets anyone take part in validation and dispute resolution, went live on Arbitrum One in February 2025 to reduce concerns about centralized validation.
Arbitrum also offers Arbitrum Orbit, which lets teams launch their own custom chains (including L3s) using Arbitrum technology. Arbitrum continues work on revenue experiments such as the Timeboost transaction-ordering auction and on performance improvements like lower data costs.
The main debate around Arbitrum is whether value really accrues to ARB. Gas on Arbitrum is paid in ETH and ARB is used for governance, so network growth may not flow directly to ARB. Arbitrum also faces strong competition from other Layer 2s such as Base and Optimism.
Arbitrum's sequencer, which orders transactions, still depends on a single operator, and token unlocks add to supply. Per Tokenomist data as of August 2026, about 92% of ARB's total supply was unlocked or held in the DAO treasury, with the rest scheduled to vest by March 2027. This article is for information only and is not investment advice.
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