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As you may know, Ethereum is the leading blockchain for implementing smart contracts. Despite notable progress made in enhancing scalability through the implementation of the Shanghai update, the Ethereum network supports a limited range of 20-40 TPS (transactions per second). This capacity falls short in meeting the demands of its expansive user base, leading to high transaction fees and sluggish processing times. In light of these challenges, the introduction of Arbitrum Ecosystem offers a promising solution to address these concerns and reshape the Ethereum landscape.

What is Arbitrum?

Arbitrum is a Layer 2 (L2) solution for Ethereum that enhances the user experience by enabling faster and more cost-effective transactions, with the capacity to handle up to 40,000 TPS. Is composed of two distinct chains, Arbitrum Nova and Arbitrum One, each chain serves specific real-world use cases.

Arbitrum One uses a rollup protocol, wherein the correct behavior of the Arbitrum Virtual Machine (AVM) is ensured by a single honest node. This chain offers a versatile platform for running Ethereum-compatible smart contracts, providing scalability and cost-efficiency. By employing optimistic execution, Arbitrum One considers all transactions valid unless a node identifies suspicious activity. Validators can participate by running the required software and staking Ethereum.

On the other hand, Arbitrum Nova adopts the anytrust protocol, catering to applications that prioritize high transaction throughput over complete decentralization (for example web3 games). While sacrificing some decentralization, Arbitrum Nova delivers enhanced speed and reduced transaction fees under the management of a 20-member Data Availability Committee (DAC), responsible for expediting the storage, batching, and posting of L2 transaction data to Ethereum’s Layer 1 (L1).

Arbitrum Ecosystem

Since its launch on the Ethereum mainnet in August 2021, Arbitrum has experienced remarkable growth. Many users have started using it, and there are now 525 projects using Arbitrum’s network.

Arbitrum made a significant change by becoming a decentralized autonomous organization (DAO). As part of this shift, they launched an airdrop program in March of this year. Users and community members had the opportunity to complete certain tasks and interact with the network to qualify for the airdrop. The main goal of the airdrop was to encourage more people to join and strengthen the community.

Today, Arbitrum has become one of the top projects in the cryptocurrency world, showing impressive growth. The following image presents some important numbers that highlight the achievements of the Arbitrum ecosystem:

These numbers demonstrate the success and growth of the Arbitrum project, showing its increasing prominence in the crypto industry.

Arbitrum Ecosystem vs other L2s

Even though Arbitrum has made significant progress in attracting new developers and users, it faces tough competition from other platforms. Let’s take a look at two of its main rivals:

  • Polygon is a sidechain that uses the proof-of-stake (PoS) mechanism for reaching agreement on transactions. It is only compatible with Solidity and Vyper, which are two programming languages for Ethereum’s virtual machine (EVM). Polygon boasts a higher transaction speed of 65,000 TPS and has its own native token called $MATIC. Since Polygon operates as a sidechain, it has its own separate consensus mechanism and operates independently of the Ethereum mainchain. While this gives it more freedom, it also means it doesn’t directly inherit Ethereum’s security. If something goes wrong on Polygon, it could potentially compromise assets without affecting the main Ethereum chain.
  • Optimism is also an optimistic rollup chain that uses Ethereum’s consensus protocol. It is compatible only with Solidity, similar to Polygon, as both use the Ethereum Virtual Machine (EVM). However, Optimism has a lower transaction speed of 2,000 TPS. One of the key differences between Optimism and Arbitrum is that Arbitrum uses its own AVM (Arbitrum Virtual Machine). This distinction brings some benefits to Arbitrum, as it is not as tightly coupled to Ethereum as Optimism, which may provide greater flexibility and opportunities for future developments.

So while Arbitrum faces strong competitors like Polygon and Optimism, its unique features and capabilities, such as the AVM, set it apart from the rest and could prove advantageous in the evolving landscape of blockchain technology.

How to bridging tokens to Arbitrum ecosystem

Arbitrum Bridge allows users to transfer their assets from Ethereum to Arbitrum Nova or Arbitrum One. Assuming you already have Metamask installed, follow these steps to get started:

  1. Add the Corresponding Network: In this example, we’ll focus on Arbitrum One, but the same process applies to Arbitrum Nova. Add the network details as follows:

Network Name: Arbitrum One


Chain ID: 42161

Currency Symbol: ETH

Block Explorer URL:

  1. Then you should visit and login with your wallet. You will see the following:

  1. Choose the token you wish to bridge and specify the corresponding amount. A summary will be displayed, indicating the costs and the total amount you are about to transfer.
  1. Once you are satisfied with the details, accept the transaction. This initiates the asset transfer process.

That’s it! You have successfully transferred your assets from Ethereum to Arbitrum One. The process for withdrawing assets follows the same steps, with the only difference being the selection of the “From” and “To” networks.

Final thoughts

In conclusion, Arbitrum Ecosystem has emerged as a promising Layer 2 (L2) solution within the Ethereum ecosystem. It offers significant improvements in transaction speed and cost-effectiveness, addressing the scalability challenges faced by the Ethereum network. Since its launch, Arbitrum has experienced impressive growth, attracting a diverse range of projects and establishing itself as one of the top players in the cryptocurrency world.

However, it is crucial to acknowledge that Arbitrum faces stiff competition from platforms like Polygon and Optimism. Polygon’s higher transaction speed and independent consensus mechanism, coupled with Optimism’s compatibility with Solidity, pose significant challenges to Arbitrum’s quest for dominance.

While Arbitrum has unique advantages, such as its AVM and seamless compatibility with Ethereum, it still has room for further development and refinement. It needs to address these challenges head-on and continue to innovate to secure its position as the go-to solution for scaling Ethereum effectively. It will be fascinating to see how it evolves and competes against its rivals in the race to become the number one project for scaling Ethereum.

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joel saidman

Passionate software engineer with a keen interest in emerging technologies. Always eager to learn and innovate.