What is Arbitrum?

Arbitrum is a family of layer 2 networks that run on top of Ethereum to make transactions faster and cheaper. Its main chain, Arbitrum One, is an optimistic rollup that executes transactions off Ethereum and posts the data back to it. Arbitrum was created by Offchain Labs, a firm founded by Ed Felten, Steven Goldfeder and Harry Kalodner, and Arbitrum One launched in 2021.

How does Arbitrum One work?

Arbitrum One follows the optimistic rollup model. A sequencer orders incoming transactions and gives users near-instant soft confirmations. Transactions are then batched and posted to Ethereum, which Arbitrum uses for data availability and settlement.

Results are assumed correct unless someone challenges them. On Arbitrum One, the challenge period is 6.4 days, and the DAO can change it. Arbitrum's dispute protocol, BoLD (Bounded Liquidity Delay), is active on Arbitrum One and Nova. It replaced a system limited to allowlisted validators, so now anyone can take part in validating the chain and opening challenges.

The current software, called Nitro, runs a fork of Geth, an Ethereum client, so Arbitrum chains are EVM compatible and familiar Ethereum tools work. You can read more about that in what is the Ethereum Virtual Machine.

What is Arbitrum Nova?

Arbitrum Nova is a second chain aimed at cheaper transactions for uses like gaming and social apps. Instead of posting all data to Ethereum, it uses the AnyTrust protocol, where a permissioned Data Availability Committee handles data. That lowers fees but adds a trust assumption that Arbitrum One does not have. Anyone can also launch their own chain on the Arbitrum stack, which settles to a parent chain such as Ethereum.

What is the ARB token used for?

ARB is an ERC-20 governance token native to Arbitrum One. Holding it makes you part of the ArbitrumDAO, which governs Arbitrum One, Arbitrum Nova and the 12 member Security Council that can take emergency action. Holders vote on upgrades and treasury spending, or delegate their votes. See what is a DAO for how this kind of governance works.

ARB launched with an initial supply of 10 billion tokens. Up to 2 percent more can be minted per year, but only through a DAO vote. At launch, 35.28 percent went to the DAO treasury, 26.94 percent to team, contributors and advisors, 17.53 percent to investors, 11.62 percent to users through an airdrop, 7.5 percent to the Arbitrum Foundation and 1.13 percent to DAOs. The user airdrop opened on March 23, 2023 and closed on September 24, 2023.

What is the difference between Arbitrum and Optimism?

Both are optimistic rollups on Ethereum, so they share the same basic idea of posting data to Ethereum and allowing fraud challenges. The differences are in software and governance. Arbitrum runs on Nitro and its own dispute protocol, BoLD, and is governed by ARB holders in the ArbitrumDAO. Optimism is built on the OP Stack, which many other chains also use, and is governed by a two-house system that includes OP token holders. Check each project's docs for current details as of October 2026.