Congestion on the Ethereum network is a real problem. Higher transaction fees and slower transaction times are just two of the many symptoms of network overload. Currently, many projects are being created to help offload some of the data storage from Layer 1 onto Layer 2, and one of the leading technologies in the process is Arbitrum. Here we explore everything you need to know about Arbitrum and its impact on the Ethereum network.

What is Layer 2?

Layer 2 is comprised of projects that are built upon the main Ethereum network layer—Layer 1—with the goal of reducing overall congestion on the network and lowering transaction fees. The Layer 2 projects essentially help offload and condense the Layer 1 transactions into smaller data amounts that can then live outside the Layer 1 grid. Until Ethereum 2.0 is up and running, Layer 2 solutions will continue to act as patches that will help mitigate the volume on Layer 1 and will help act as stop-gaps to easing the building pressure on the network. Arbitrum is just one of the many technologies that helps alleviate the mounting pressure on Layer 1 as it scales into the future of the blockchain.

What is Arbitrum?

Arbitrum is a technology that helps clear up congestion on the Layer 1 grid of the Ethereum network by working on Layer 2 subdividing challenges into very small quantities so that they can be sent quickly back to Layer 1. In other words, Arbitrum helps reduce the volume of activity on Layer 1 by consolidating data into smaller sizes, which ultimately helps the entire Ethereum system run more effectively and efficiently. This is also known as optimistic rollup technology, which utilizes off-chain infrastructure to provide their space-saving data consolidation.

How Arbitrum Can Help

What’s super cool about Arbitrum technology is that it expands the abilities of the Ethereum network, without sacrificing the safety and security guarantees of the network. While other data optimization solutions could be developed that could potentially be more advantageous than Arbitrum and other Layer 2 technologies, Arbitrum and its related tech are the only types of scaling solutions that allow for the growth of the Ethereum network, while also keeping the security benefits of the network intact. Any other scaling options at this time would result in the sacrifice of security for transactions, data, storage, and processing.

The Future Of Arbitrum

The future of smart contracts is uniquely intertwined with Arbitrum. As Arbitrum technology continues to advance and improve, users can expect to see an increase in speed and scalability of smart contracts and improved security measures, as well as the continued lowering of transaction fees as the system becomes more and more efficient at crunching and consolidating large amounts of data. Future versions of Arbitrum will include higher EVM compatibility, more flexible and easy to use developer tools, and an expanding network of Ethereum DApps and network projects such as Sushi, Uniswap, and DODO among others.

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