L2

Arbitrum ARB

The largest Ethereum Layer 2 by total value locked, an optimistic rollup that runs the Ethereum Virtual Machine with much lower fees.

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Founded
2021
Founder
Offchain Labs / Steven Goldfeder, Ed Felten, Harry Kalodner
Consensus
Optimistic Rollup
Max Supply
10,000,000,000

What ARB is

Arbitrum is an Ethereum Layer 2 network developed by Offchain Labs. It is the largest L2 by total value locked, hosting major DeFi protocols (GMX, Camelot, Aave deployment) and a significant fraction of Ethereum's economic activity in 2026. Arbitrum is an optimistic rollup: it executes transactions off-chain, posts compressed batches to Ethereum L1, and relies on a 7-day fraud-proof window to catch invalid state transitions.

How it works

Arbitrum's main chain is Arbitrum One; it also operates Arbitrum Nova (a lower-cost variant for gaming and social applications). Transactions execute on Arbitrum's sequencer, which orders them and posts batches to Ethereum. The execution environment is fully EVM-compatible, so any Ethereum smart contract works on Arbitrum without modification. Withdrawals to L1 take 7 days unless using a third-party "fast bridge" that fronts the funds.

Use cases

DeFi dominates: GMX for perpetuals, multiple AMMs, lending protocols (Aave, Radiant), liquid staking. Arbitrum has also grown an on-chain gaming ecosystem and hosts significant stablecoin supply (USDC, USDT). The ARB token launched in March 2023 via airdrop and is used for governance of the Arbitrum DAO.

Tradeoffs and criticism

Optimistic rollups have a 7-day withdrawal window unless you use a third-party bridge. Arbitrum's sequencer is currently centralized (Offchain Labs operates it), with decentralization on the roadmap. As an L2, Arbitrum still depends on Ethereum L1 for security and data availability; high L1 fees increase L2 costs.

Where to track ARB

For deep context, see Layer 2, optimistic rollup, and rollup in the glossary.

Related coins

Frequently asked questions

How is Arbitrum different from Ethereum?
Arbitrum runs the same EVM and inherits Ethereum security but executes transactions off the main chain, posting compressed batches back. Fees are 10-100x lower than Ethereum L1.
Why does it take 7 days to withdraw from Arbitrum?
Optimistic rollups assume batches are valid and use a 7-day challenge window for fraud proofs. Native withdrawals must wait this period; third-party fast bridges front the funds for a fee, accepting the delay themselves.
What is ARB used for?
ARB is the governance token of the Arbitrum DAO. Token holders vote on protocol upgrades, treasury allocations, and ecosystem grants. ARB is not used for paying gas on Arbitrum; gas is paid in ETH.