27 Mar What is Arbitrum (ARB)?
Posted at 18:11hin Tokenbyadmin
Arbitrum, is an Ethereum layer-two scaling solution, which leverages optimistic rollups to enhance speed, scalability, and cost-efficiency, maintaining Ethereum’s security and compatibility. It significantly reduces transaction fees and increases throughput by offloading most computation and storage off-chain. Arbitrum’s native governance token, ARB, gives ARB holders governance privileges within Arbitrum’s Decentralised Autonomous Organisation (DAO) framework, the Arbitrum DAO. ARB allows ARB holders to vote on protocol upgrades and other critical decisions, facilitating a community-driven evolution of the platform.
Founded by Offchain Labs, Arbitrum has a development team rooted in academia and blockchain research, bringing a blend of expertise to the platform. The project’s dedication to advancing Ethereum’s scalability is evident in its ambitious 2023 roadmap, which introduced novel layer-three solutions and broadened developer capabilities, reinforcing Arbitrum’s position as an innovative player in the Ethereum ecosystem. This strategic direction, supported by a substantial $120 million Series B funding round, demonstrates the industry’s confidence in Arbitrum’s potential to significantly impact Ethereum’s scalability and usability.
Arbitrum distinguishes itself with its optimistic rollup technology, offering seamless compatibility with existing Ethereum DApps, high transaction throughput, and a flexible development environment that supports various programming languages. Its decentralised validator network, devoid of centralised control for transaction ordering, emphasises the platform’s commitment to decentralisation. The robustness of Arbitrum’s ecosystem is further demonstrated by its diverse array of DApps, wallets, and tools, making it a leading solution for enhancing Ethereum’s performance.
What is the ARB Token?
The ARB token is the native governance token associated with Arbitrum, an Ethereum Layer-2 scaling solution. It plays a pivotal role in the decentralised governance of the Arbitrum ecosystem through a structure known as the Arbitrum DAO. ARB token holders have the power to vote on key proposals that influence the direction and development of the Arbitrum protocols, including Arbitrum One and Arbitrum Nova.
These proposals can range from feature enhancements, protocol upgrades, allocation of funds, to the election of the Security Council members who oversee certain emergency and administrative actions within the network. The ARB token facilitates community-led decision-making, ensuring that Arbitrum’s evolution aligns with the collective interests of its users and stakeholders. The total supply of ARB tokens is fixed, emphasising its role in enabling a decentralised, secure, and user-governed scaling solution for Ethereum applications.
Two weeks ago, on March 16th, Arbitrum, a prominent Ethereum layer 2 scaling solution, initiated a significant token unlock event, releasing over $1 billion worth of ARB tokens into the market. This event marked the beginning of a four-year plan to gradually unfreeze the protocol’s native digital asset, with the initial “cliff unlock” liberating 1.11 billion ARB tokens, which constituted 87% of its circulating supply at that time. At the prevailing market rate of $1.12 per ARB token, the unlocked amount was valued at approximately $1.24 billion. This release was part of a broader strategy to stagger the availability of previously frozen cryptocurrencies, aimed at regulating the impact of early investors or project team members potentially selling their holdings in significant volumes.
The approach taken by Arbitrum involves a methodical release of tokens, with the protocol set to continue unfreezing a specified quantity of tokens every four weeks over the span of four years, as reported by Token Unlocks. Such unlocks are designed to increase liquidity in the market but are often viewed as bearish triggers for the cryptocurrency’s price due to the potential increase in selling pressure. Analytics from The Tie suggest that token unlocks amounting to more than 100% of the average daily trading volume can exert downward pressure on the price of the cryptocurrency.
ARB Tokenomics
How to buy ARB with crypto
1. Log in to your Bitfinex account or sign up to create one.
2. Go to the Deposit page.
3. In the Cryptocurrencies section, choose the crypto you plan to buy ARB with and generate a deposit address on the Exchange wallet.
4. Send the crypto to the generated deposit address.
5. Once the funds arrive in your wallet, you can trade them for ARB. Learn how to trade on Bitfinex here.
How to buy ARB with fiat
1. Log in to your Bitfinex account or sign up to create one.
2. You need to get full verification to be able to deposit fiat to your Bitfinex account. Learn about different verification levels here.
3. On the Deposit page, under the Bank Wire menu, choose the fiat currency of your deposit. There’s a minimum amount for fiat deposits on Bitfinex; learn more here.
4. Check your Bitfinex registered email for the wire details.
5. Send the funds.
6. Once the funds arrive in your wallet, you can use them to buy ARB.
Also, we have Bitfinex on mobile, so you can easily buy ARB currency while on-the-go.
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