With so many major cryptocurrencies having undergone a fair amount of volatility in recent times, Crypto Lists always aims to provide our readers with a bit of inside advice when a new opportunity presents itself. This happens to come in the form of a token some of you may know… Arbitrum.
The release this month came as a bit of a surprise to everyone, with the Arbitrum network insisting for some time that they had no intention of launching a coin. Then they announced an airdop planned for the 23rd March and the crypto scene went bananas.
So, why might Arbitrum (ARB) represent a big opportunity? What makes this altcoin slightly different from its counterparts? If you’re keen to take advantage of a dark horse with potential stamina, be sure to keep reading.
What Exactly is Arbitrum?
This token is the native coin of a Layer 2 (L2) scaling solution of the same name that employs smart contracts and rollups. Its primary purpose is to support mainnet Ethereum (ETH) transactions. Launched by Off-Chain Labs in 2021, Arbitrum is a relative newbie when compared to other well-known cryptocurrencies. This might also represent one of its primary advantages.
Arbitrum essentially works by taking a specific batch of transactions from the mainnet. These are then processed off-chain before being resubmitted as a single block back onto Layer 1. In other words, users can perform many of the same actions associated with L1 cryptocurrencies while potentially bypassing some of the hiccups along the way.
Now that we’ve taken a quick look at ARB in terms of functionality and purpose, what makes it an interesting option for punters and serious investors alike?
Arbitrum Versus Ethereum
Let’s first point out that Ethereum is still one of the most popular crypto tokens on the market due in part to its sheer market volume. Still, it’s wise to mention that ETH comes with some possible drawbacks such as:
- Transaction fees
- Transactions per second
ARB was engineered to address many of these problems. The final point mentioned above is of particular interest. The Ethereum ecosystem is capable of supporting approximately 14 transactions per second (TPS). While impressive at first glance, multiply this number by 2.5 and add a few zeros. Arbitrum can handle over 14,000 transactions per second. If you’ve got the need for speed, ARB aims to please.
Complex Smart Contracts
However, this is only the beginning. We need to point out that the mainnet (Layer 1) has always been associated with high gas fees. These ultimately lead to hefty transaction charges and the possibility of network congestion. ARM aims to address such issues thanks to its Layer 2 status.
Another interesting application of Arbitrum involves how it can be used to create dApps within the Ethereum network. Why is this the case? Without descending into a digital rabbit’s hole, rollups such as ARB support more computational volume when compared to the mainnet. So, it’s now possible for crypto developers to create more complex and targeted smart contracts.
The gurus behind this asset also seem to be taking their growing presence quite seriously. For example, were you aware that they are currently offering Arbitrum airdrops to those who use this token in conjunction with certain dApps at no additional cost? Talk about (virtual) pennies from heaven!
A Smarter Solution for ETH Enthusiasts?
It’s s well-known fact that the Ethereum ecosystem has taken a number of hits in recent times. These are primarily due to the growing popularity of NFTs and decentralized finance (DeFi) instruments. To cut to the chase, these situations have made it difficult for average ETH users to take full advantage of the network. Arbitrum aims to circumvent such issues.
In terms of growth, ARB also needs to be taken seriously. At the time that this article was written, a metric known as Total Value Locked (the number of staked assets) stood at $1.85 billion dollars. This TVL is the highest within the entire Layer 2 ecosystem. Considering that prices are relatively stable when compared to other cryptocurrencies, the future looks impressively bright.
The Road Ahead…
On a final note, the DevOps team at Arbitrum has set out an ambitious roadmap for the remainder of 2023. In addition to their airdrops, they plan on creating a Layer-3 protocol known as Orbit. This will be able to support popular programming languages such as Stylus, Rust and C++, so even more institutional validators could soon jump on board.
As always, the team Crypto Lists will continue to perform our due diligence in order to provide you with the latest cryptocurrency news and advice. What do you think about this opportunity? We’d love to hear from you! If you wish to learn more about Arbitrum, feel free to drop us a line at a convenient time.
ARB Price Predictions
Some people in the online crypto analyst space think Arbitrum (ARB) could end up in the top 15, or even top 10 during the next bull run. The Bitcoin halving event takes place in spring next year, after which we normally experience two years of growth. Historically speaking at least.
Disclaimer: Crypto is extremely volatile and not suitable for everyone to invest in. Never speculate with money that you cannot afford to lose. The information on this site is presented for educational purposes only and should not be construed as investment or financial advice.