So, you’re new to the blockchain technology world and you have just learned a little bit about Bitcoin and Ethereum. Then, during your research, you came across Arbitrum, and you’re wondering who these people are.

To simplify, Arbitrum is a suite of technological innovations designed to scale Ethereum. Arbitrum chains are Layer 2 networks built to reduce Etheruem's computation load, making transactions cheaper and faster.

Arbitrum solutions

Arbitrum has a handful of solutions that are being used to scale Ethereum today. 

Our flagship product, Arbitrum One, is the live implementation of the Arbitrum Rollup Protocol. The solution is designed to rely on Ethereum for security whilst moving some components offchain. 

There is also Arbitrum Nova, the live implementation of the Arbitrum AnyTrust Protocol, which reduces transaction fees by storing transaction data offchain using a Data Availability Committee (DAC). 

Both Arbitrum One and Arbitrum Nova are built using Arbitrum Nitro, the core node software for  Arbitrum chains. 

What is the Arbitrum Rollup and why do we need it?

Ethereum is designed so that almost anyone can spin up an Ethereum node and validate the chain. Every Ethereum full node must process every transaction, meaning the blockchain’s throughput is relatively low. This was intentionally designed to ensure that the network remains decentralized and secure. 

The Arbitrum Rollup Protocol could be seen as an extension of Ethereum. Arbitrum One users can process their transactions faster and at a lower price than on Ethereum itself while leveraging Ethereum’s security.

Like most rollup solutions, the Arbitrum Rollup Protocol processes transactions offchain, then bundles them into batches before submitting them to Ethereum. Ethereum optimistically assumes that all transactions on Arbitrum are valid until proven otherwise through our dispute protocol, which is another reason why you would often hear people referring to the Arbitrum rollup as an “optimistic” rollup solution.

What steps are in place to ensure that no fraudulent activity slips through the cracks?

Arbitrum currently has fraud-proof mechanisms to ensure no fraudulent activities occur. These mechanisms rely on validators who track state transitions or the chain's progress. Validators make claims about the chain's state and can dispute the claims of others.

It's not expected that every Arbitrum user would be interested in becoming a validator, but it is worthwhile noting that anybody who is interested in becoming a watchtower validator can do so. Additionally, the Arbitrum fraud-proof mechanism is designed so that even having one honest validator will be enough to ensure that the chain remains secure. 

Arbitrum’s fraud-proof system is a fundamental feature of the Rollup Protocol, and it is how the system is able to inherit Ethereum security. 

How does the Arbitrum AnyTrust Protocol differ from Arbitrum Rollup?

Crypto transaction data is stored on a network and should be accessible and recoverable by all network participants. This is often called “data availability” and is critical to preventing fraudulent activity. While rollups post all transaction data to Ethereum, the AnyTrust Protocol offers an alternative solution. 

The Arbitrum AnyTrust Protocol achieves this by introducing additional trust assumptions that make transactions cheaper. Unlike the Arbitrum Rollup Protocol, which is trustless and can be more gas-intensive, the Arbitrum AnyTrust Protocol uses what we call a Data Availability Committee (DAC) to store data offchain and provide it on demand instead of relying on Ethereum as the Data Availability (DA) Layer. 

The DAC comprises trusted parties that must make data available during a dispute. Members of the DAC are also responsible for publishing onchain attestations to show that the data is available.

How did you build all this?

All of these different Arbitrum products are built using Arbitrum Nitro, the tech stack that incorporates Geth (go-ethereum) — the standard EVM engine for Ethereum. Abitrum Nitro replaced the old Arbitrum tech stack (Arbitrum Classic) in August 2022, 

In addition to Arbitrum Nitro, the team is also developing a new tech stack called Stylus, a new Virtual Machine that runs alongside the EVM. Stylus enables smart contract developers to write smart contracts in more languages, including Rust and C++. Stylus is currently live on Arbitrum Sepolia.