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What Is Arbitrum and How It Could Be Used to Increase the speed of Ethereum By Optimistic Rollup

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April 2, 2022

Blockchain network in the digital world is the father of all core operations and functionalities for its based on industries. On that, the trend today is Ethereum utilizing the Optimistic Rollup technique, the powerful scaling solutions from Arbitrum. Considering, this blog is going to explain the details in the following. 

Let’s get it started!

What Is Ethereum?

Ethereum in the crypto world is a popular blockchain network among crypto enthusiasts. Since it was created by Offchain Labs and launched in 2015, it would be considered the most secure blockchain with supporting smart contracts. Several popular decentralized applications like Uniswap, Sushiswap, 1Inch, etc. are made through the network focusing on its high reliability and a well-established state among the global audiences.

Right from it is expensive and has a minimum transaction speed, which is 14 per second, many users were switched over to another blockchain such as Solana, Fantom, etc. in time. As it is,  to speed up the Ethereum performance and lower the transaction fee as per demand, the Arbitrum with the powerful optimistic rollup technique is now widely used by a lot of service providers in the crypto world.

What Is Arbitrum?

Arbitrum or Arbitrum One is a layer 2 scaling solution, launched in May 2021 as a beta of  Ethereum Mainnet (layer 1). As the upgrading was beneficial to the developers only, until early July, the Arbitrum came to public launch finally on Aug 31st after Offchian Labs had introduced nearly 300  decentralized applications (dApps) with the beta, and boomed to +400 in the next.

The Arbitrum rapidly speeds up the transaction count of Ethereum to 40,000. So that, from the entrepreneurs to the users on the blockchain, has a lot of benefits to point out. In it, for example, its support of Ethereum Virtual Machine (EVM) greatly assists in the integration of dApps without the need for any modifications. 

Following that, explore its workflow and details below for more clarity.

Core Technology of Arbitrum

Typically, Arbitrum functions on a set of ETH smart contracts known as EthBridge, the core technology. They are three different types of contracts: Inbox Contract, Outbox Contract, and Rollup Contract.

Inbox Contract - Handles the inbox of the blockchain like keeps on tracking each message into the chain’s inbox. 

Outbox Contract - As same as the Inbox Contract, the Outbox Contract too manages the outputs of the respective chain.

Rollup Contract - The Rollup Contract is a Challenging contract. It is responsible for handling the rollup protocol. So it tracks the state of the Arbitrum chain and performs things like which rollup blocks are correct to resolve any disputes between validators on stuff like which rollup blocks have been proposed, accepted, and/or rejected and which people have stacked in recent times.

How Does Arbitrum Work?

As discussed, Arbitrum is an Optimistic Rollup technique. It performs passing messages between smart contracts on the Ethereum main chain and on the Arbitrum/the second layer chain to make those contracts too scalable. On that, many of the transactions are completed on the second layer while all their records are registered on the main chain. Following the effective process, the speed and efficiency of each transaction get improved substantially.

What Is an Optimistic Rollup Technique?

Optimistic Rollup, the phrase, we could split into two terms to understand its meaning. A Rollup is a type of data compression technology for blockchain transactions, which executes the compaction of a punch of transactions into a single one. Therefore, the blockchain gets facilitated with the requirement for processing only a single transaction instead of validating each transaction within the rollup. 

And, Optimistic in the sense, any validator can post a rollup block to confirm the validity of other blocks by an optimized log of events. Right from the Arbitrum protocol ensures that code runs correctly, it assists the network in avoiding collusion and other forms of attacks with strong and honest validations.

Now we blend the separation and find the meaning for the Optimistic Rollup, that it saves a lot of time in multiple transactions confirmed at once on the Ethereum blockchain.

The Future of Arbitrum and Ethereum 2.0

Arbitrum at present is a steadily establishing scaling solution, which onboards several fascinating DeFi projects in the blockchain domain. Due to Ethereum 2.0 is going to be rollup-centric, Arbitrum will constantly practice the highest traction and adoption. Right from Arbitrum launches a public chain known as “Arbitrum 1”, there will be diverse rollup chains that would specialize in different use cases and projects. 

And then, they can choose the best rollup chain as per needs. Accordingly, there will be one single rollup that includes several DeFi projects on the same chain.

In Conclusion

As discussed in this blog, the power of Arbitrum, the L2 scaling solution for Ethereum blockchain is going to be the future of Ethereum 2.0, and it's based on DeFi projects. As Arbitrum is ready to roll out a feature named AnyTrust Chains, the users of the Ethereum blockchain will experience reduced fees and increased speed dynamically in the network.

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