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What is Arbitrum? The Ethereum rollup and its ARB token

Arbitrum runs Ethereum apps off the main chain and settles the results back, which lowers fees, while its ARB token lets holders vote on network decisions.

Vahe HakobyanEditor-in-chief Updated Oct 6, 20263 min readFact-checked

Illustration: World-Crypt

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What is Arbitrum used for?How does Arbitrum work?Who created Arbitrum and when?How is Arbitrum different and what risks?FAQ

Key takeaways

Settlement and security for Arbitrum come from Ethereum.
It is an optimistic rollup, not a separate blockchain.
Bridges to Arbitrum add delays and their own risks.

Short answer

Arbitrum is an Ethereum scaling network with a governance token called ARB. It runs activity off Ethereum's main chain and settles the results back, which brings costs down.

Most people meet Arbitrum through the apps that run on it. Trading and lending apps built for Ethereum have versions on Arbitrum.

What is Arbitrum used for?

Arbitrum exists so you can use Ethereum apps at lower cost. You move assets across through a bridge. A bridge holds your tokens on one chain and credits the same amount on the other. The tokens then sit in your wallet on Arbitrum.

Swap one token for another on a decentralized exchange.
Lend and borrow through finance apps.
Use ARB to vote on how the network is run.

How does Arbitrum work?

Arbitrum is an optimistic rollup. It does its work on its own network and posts batches to Ethereum, which stores the record and settles the outcome. A batch stands unless someone disputes it and a rule is found broken.

Who created Arbitrum and when?

Offchain Labs, founded in 2018, built Arbitrum. Arbitrum One went live in August 2021, and ARB became tradable in March 2023.

Arbitrum's two networks
Feature	Arbitrum One	Arbitrum Nova
Main use	General apps	Low-cost apps
Data	Posted to Ethereum	Held by a committee
Launched	2021	2022

How is Arbitrum different and what risks?

Ethereum is the base chain: it holds Arbitrum's records and supplies the security behind them. Other scaling networks use different designs, such as zero-knowledge proofs. Bridges carry the sharpest risk: an exploit on the Hyperbridge bridge in April 2026 was later put at about US$2.5 million in losses. US tax rules treat crypto as property, so buying ARB with dollars is not taxable, while trading it for another token is.

Frequently asked questions

A wallet that supports Ethereum can add Arbitrum One, and your address stays the same.

Not in practice. There is no version of Arbitrum that runs without Ethereum.

No. Transactions on Arbitrum are paid in ETH, and ARB is a governance token.

Arbitrum One is the general-purpose network, while Nova is built for lower-cost apps.

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Written byVahe HakobyanVahe Hakobyan is the editor-in-chief of World-Crypt. He covers bitcoin, markets and regulation, and leads the newsroom that fact-checks every story before it goes live.