Skip to main content

What is Arbitrum One

What is Arbitrum One

Arbitrum One is an Ethereum Layer 2 (L2) blockchain network that uses optimistic rollup technology to process transactions off Ethereum L1 at lower cost and higher throughput, while inheriting Ethereum's security for final settlement. Developed by Offchain Labs, Arbitrum One launched its mainnet in August 2021 and is one of the most established Ethereum L2 networks.

In short: Arbitrum One is an Ethereum L2 optimistic rollup with EVM compatibility, its own governance token (ARB), and a mature ecosystem. In DecAIHub, it appears in the Main chain field for projects deployed on the Arbitrum One network.

How Arbitrum One works

Arbitrum One operates as an optimistic rollup built on the Arbitrum Nitro technology stack. Its core mechanics involve off-chain execution with on-chain data availability and a fraud proof system for dispute resolution.

Optimistic rollup with Nitro

Like other optimistic rollups, Arbitrum One processes transactions off Ethereum and posts compressed transaction data back to the L1. The "optimistic" part means transactions are assumed valid unless challenged:

  • Off-chain execution. Transactions are executed on the Arbitrum One network by a sequencer, which orders and batches them for submission to Ethereum.
  • Data posting to Ethereum. Compressed transaction data is posted to Ethereum L1, ensuring that anyone can independently reconstruct Arbitrum One's state and verify transaction validity.
  • Fraud proofs (interactive). Arbitrum uses an interactive fraud proof system, which distinguishes it from other optimistic rollups. Instead of replaying an entire batch on-chain (which is expensive), the dispute protocol uses a bisection game to narrow down the exact point of disagreement to a single computational step, which is then verified on Ethereum. This makes fraud proofs more efficient.
  • Challenge period. After a transaction batch is posted to Ethereum, there is a challenge period (approximately 7 days) during which validators can submit fraud proofs. After this period, the batch is considered finalized.

The Nitro technology stack is an upgrade from Arbitrum's original technology (now called "Classic"). Nitro provides:

  • WASM-based fraud proofs. Nitro compiles the execution environment to WebAssembly (WASM) for fraud proof verification, improving efficiency and compatibility.
  • Improved compression. Nitro uses more efficient data compression for posting transaction batches to Ethereum, reducing L1 data costs.
  • EVM equivalence. Nitro provides near-complete compatibility with the Ethereum Virtual Machine, meaning Ethereum smart contracts usually work on Arbitrum One with minimal modifications.

EVM compatibility

Arbitrum One is EVM-compatible, which means:

  • Smart contracts written in Solidity or Vyper for Ethereum deploy on Arbitrum One without changes in most cases.
  • Standard Ethereum developer tools (Hardhat, Foundry, Remix, ethers.js) work with Arbitrum One by pointing to the Arbitrum RPC endpoint.
  • Token standards like ERC-20 work natively on Arbitrum One.
  • Users interact with Arbitrum One through the same wallets (MetaMask, etc.) used for Ethereum, by adding the Arbitrum One network.

There are differences in behavior (gas accounting, precompiled contracts, block.number semantics, and finality) between Arbitrum One and Ethereum L1. For many applications they are transparent, but not guaranteed: a contract should be tested on Arbitrum (and re-audited if needed) before deployment with real funds.

Sequencer

The sequencer is the entity responsible for ordering transactions on Arbitrum One and submitting batches to Ethereum. Currently, the sequencer is operated by Offchain Labs. This means:

  • Transaction ordering is centralized. The sequencer determines the order in which transactions are included in batches.
  • Availability depends on the sequencer. If the sequencer goes down, new transactions cannot be processed on the L2 (though existing assets can be withdrawn to Ethereum through the rollup's contract).
  • Sequencer decentralization is on the roadmap. The sequencer is operated by Offchain Labs, with plans to decentralize it.

This is a common characteristic of current optimistic rollups — both Arbitrum One and Base operate with centralized sequencers, with decentralization planned for the future.

ARB token and governance

Unlike Base, Arbitrum One has its own governance token — ARB:

  • ARB is used for governance of the Arbitrum DAO, which oversees the Arbitrum One and Arbitrum Nova networks.
  • ARB holders can vote on protocol upgrades, treasury allocations, and ecosystem decisions.
  • ARB is not used for gas fees — gas on Arbitrum One is paid in ETH, similar to Base.
  • The Arbitrum DAO controls a significant treasury funded by the initial ARB distribution.

Arbitrum ecosystem

Arbitrum One is part of the broader Arbitrum ecosystem, which includes:

  • Arbitrum One — the primary L2 network for general-purpose smart contracts and DeFi.
  • Arbitrum Nova — a separate L2 optimized for high-throughput, low-cost use cases like gaming and social applications, using an AnyTrust data availability model.
  • Arbitrum Orbit — a framework for creating custom L3 chains (appchains) that settle on Arbitrum One or Nova.
  • Stylus — a technology that allows smart contracts to be written in Rust, C, and C++ alongside Solidity, expanding the developer base beyond EVM-native languages.

For DecAIHub purposes, when a project card lists Main chain: Arbitrum One, it refers specifically to the primary Arbitrum One L2 network.

Where Arbitrum One appears in DecAIHub

  • Main chain field — Arbitrum One indicates that the project deploys smart contracts, tokens, or on-chain logic on the Arbitrum One network.
  • Token standard field — projects on Arbitrum One typically use the ERC-20 standard (same as Ethereum, since Arbitrum is EVM-compatible).
  • Type field — projects deployed on Arbitrum One typically have Type: EVM (Arbitrum One uses an EVM-compatible execution environment).

When you see Main chain: Arbitrum One in a project card, it tells you:

  • The project operates on an Ethereum L2 with competitive fees and strong EVM compatibility.
  • Transaction data is posted to Ethereum L1, providing Ethereum-level security for final settlement.
  • The project has access to one of the most established L2 ecosystems with deep DeFi liquidity.
  • Smart contracts can be inspected through Arbiscan, the Arbitrum One block explorer.
  • Gas is paid in ETH, not in the ARB governance token.

The chain field tells you where the project deploys its contracts. It does not tell you whether the project's AI claims are verified (AI reality), whether the token serves a genuine purpose (Token necessity), or whether the onchain component is meaningful (Onchain necessity). Those assessments are handled separately by the corresponding DecAIHub evaluation axes.

Key characteristics

Property Value
Type Layer 2 (optimistic rollup)
Parent chain Ethereum
Technology Arbitrum Nitro
EVM compatible Yes (EVM equivalent)
Fraud proof type Interactive (bisection protocol)
Gas token ETH
Governance token ARB
Challenge period ~7 days
Operator Offchain Labs (sequencer)

Why projects choose Arbitrum One

Common reasons AI and crypto projects deploy on Arbitrum One:

  • Mature ecosystem. Arbitrum One was one of the first major L2s and has a well-established ecosystem of DeFi protocols, tooling, and infrastructure.
  • Deep liquidity. Significant DeFi liquidity exists on Arbitrum One, making it attractive for projects that need to interact with financial protocols.
  • Ethereum security. Like all optimistic rollups, Arbitrum One inherits Ethereum's security model for final settlement.
  • EVM compatibility. Developers can reuse Ethereum-native code, audits, and tooling.
  • Stylus expansion. The Stylus upgrade allows projects to write smart contracts in Rust, C, and C++, which may be relevant for AI projects with existing non-Solidity codebases.

What Arbitrum One alone does not prove

  • Deploying on Arbitrum One does not prove the project is secure or well-audited. Arbitrum provides infrastructure; smart contract security is the project's responsibility.
  • Operating on a major L2 does not prove the project has meaningful adoption. Ecosystem maturity does not transfer to individual projects automatically.
  • Using Arbitrum's efficient fraud proofs does not prove the project itself is decentralized. The sequencer remains centralized, and the project's own architecture may add additional centralization.
  • Having access to deep DeFi liquidity does not prove the project integrates with DeFi meaningfully. Ecosystem proximity is not the same as technical integration.
  • Being on an Ethereum L2 does not prove the project requires Ethereum-level security for its use case, or that its onchain role is substantive (Onchain necessity).

Do not confuse with

  • Arbitrum Nova — a separate L2 in the Arbitrum ecosystem, optimized for high-throughput use cases with a different data availability model (AnyTrust). Not the same network as Arbitrum One.
  • ARB (token) — the governance token of the Arbitrum DAO. ARB is a token; Arbitrum One is the network. Gas on Arbitrum One is paid in ETH, not ARB.
  • Base — another major Ethereum L2, but built on the OP Stack (Optimism) rather than Arbitrum Nitro. Both are optimistic rollups on Ethereum with similar high-level properties but different underlying technology.
  • Ethereum — the Layer 1 blockchain that Arbitrum One settles on. Arbitrum One is built on top of Ethereum, not a replacement for it. See What is Ethereum.
  • Arbitrum Orbit — a framework for building L3 appchains on Arbitrum, not the L2 network itself.

Frequently asked questions

What is the difference between Arbitrum One and Base?

Both are Ethereum L2 optimistic rollups, but they use different technology stacks. Arbitrum One uses Arbitrum Nitro with interactive fraud proofs, while Base uses the OP Stack (Optimism) with non-interactive fraud proofs. Arbitrum One has its own governance token (ARB) and a DAO; Base has no native token. Arbitrum One launched earlier (August 2021 vs August 2023) and has a more mature DeFi ecosystem. Both pay gas in ETH and are EVM-compatible. The choice between them for a project typically depends on ecosystem fit, tooling preferences, and strategic considerations rather than fundamental technical limitations.

Does ARB being a governance token mean I need ARB to use Arbitrum One?

No. Gas fees on Arbitrum One are paid in ETH, not ARB. ARB is used exclusively for governance — voting on protocol decisions through the Arbitrum DAO. You do not need to hold ARB to deploy smart contracts, make transactions, or use applications on Arbitrum One.

How does Arbitrum One's interactive fraud proof differ from other optimistic rollups?

Most optimistic rollups use non-interactive fraud proofs, where the entire disputed transaction batch is re-executed on-chain to verify correctness. Arbitrum One uses an interactive bisection protocol: when a dispute arises, the challenger and the asserter engage in a back-and-forth process that narrows the disagreement down to a single computational step. Only that single step is verified on Ethereum, making the process more gas-efficient. This design reduces the cost of dispute resolution while maintaining the same security guarantees.

What happens during the 7-day challenge period?

After a transaction batch is posted to Ethereum L1, validators have approximately 7 days to submit a fraud proof if they believe the batch contains an invalid transaction. During this period, the transactions are considered "pending finalization." After the challenge period passes without a successful fraud proof, the batch is finalized on Ethereum. For most users, this delay is invisible — transactions are confirmed on L2 within seconds and can be used within the L2 ecosystem immediately. The 7-day window only affects withdrawals from Arbitrum One to Ethereum L1.

External references

  • Arbitrum documentation — official technical documentation covering Arbitrum One architecture, Nitro, and developer guides.
  • Arbiscan — the primary block explorer for Arbitrum One, useful for verifying smart contracts, transactions, and token activity.
  • Arbitrum DAO governance — documentation on the Arbitrum DAO and ARB token governance.

See also

No comments to display

Back to top