Arbitrum is a layer 2 solution that runs on the Ethereum network. Layer 2 solutions are secondary protocols that aim to increase transaction speed, scalability, and efficiency while preserving the security of the main network. Arbitrum uses a technique called optimistic rollup to send transactions in batches to the main network and verify them off-chain. This reduces transaction fees and delays significantly.
The advantages of Arbitrum are:
Compatibility: Arbitrum is fully compatible with the Ethereum virtual machine (EVM). This means that developers can easily migrate their existing smart contracts to Arbitrum or write new smart contracts for Arbitrum.
Security: Arbitrum verifies transactions off-chain without compromising the security of the main network. If a transaction is faulty or malicious, Arbitrum’s challenge mechanism detects and corrects it. This ensures that users’ funds are safe.
Customization: Arbitrum gives developers and users the ability to decide how their transactions are verified and charged. Arbitrum’s AnyTrust guarantee means that it can work with any number of validators. Also, Arbitrum adjusts transaction fees dynamically and ranks transactions according to users’ preferences.
The disadvantages of Arbitrum are:
Availability: Arbitrum has not been fully launched yet. Currently, only selected developers and projects have access to Arbitrum’s testnet version. Arbitrum’s mainnet version is expected to be released in late 2021 or early 2022.
Interoperability: Arbitrum is compatible with the Ethereum network, but not with other layer 2 solutions or layer 1 blockchains. This means that smart contracts running on Arbitrum need to use bridges to interact with other protocols. Bridges can introduce additional fees, delays, and security risks.
User experience: Arbitrum requires users to be connected to the main network to confirm their transactions. This means that users have to pay the main network’s transaction fees and delays when entering and exiting Arbitrum. Also, users may need to use a special wallet or browser extension to track their balances and transactions on Arbitrum
