[Feature] Arbitrum Takes The Stage: Basics, Airdrop, & Beyond

Arbitrum has taken center stage with its announcement of the launch and airdrop of its native governance token called ARB to users of its platform. The airdrop will happen on 23 March and at the time of writing, it is just a couple of hours away.

But before we dive into what the airdrop entails, who is eligible for it, how to claim it, and more, let us go back to the basics: what is Arbitrum?

Back to the Basics
As the world of blockchain technology expands, so does the demand for efficient and effective scaling solutions. The Ethereum blockchain, the most widely used blockchain platform for decentralised applications, has long faced issues with scalability and high transaction fees. However, a revolutionary new solution emerged: Arbitrum.

Developed by Offchain Labs, the team recognised the need for a more scalable and cost-effective solution for Ethereum, and set out to build one. Hence, Arbitrum was born.

Arbitrum is a layer-2 (L2) scaling solution for Ethereum, designed to alleviate the issues associated with the blockchain's scalability. It is based on Optimistic Rollups, a technique that enables off-chain computations to be verified on-chain through a process known as fraud proofs. Essentially, it allows for transactions to be conducted off-chain, only requiring minimal on-chain verification, drastically increasing transaction throughout and reducing gas fees.

Source: makeuseof.com

Its core purpose is intrinsically simple: to provide a seamless experience for Ethereum users by enabling faster and cheaper transactions, while also providing developers with the ability to build smart contracts with minimal overhead. Its function is to process transactions off-chain, using the Ethereum Virtual Machine (EVM) to verify the results and ensure the blockchain's integrity.

According to Arbitrum's development documentation, the below graph is at the most basic level how an Arbitrum chain works:

Based on an explanation by Decrypt, in a nutshell, people and smart contracts ask Arbitrum's blockchain to do something by placing transactions into the chain's 'inbox'. Thereafter, Arbitrum processes it and outputs a transaction receipt. How Arbitrum processes that transaction ─ what determines its 'chain state' ─ is decided by the transactions in its inbox.

What Makes Arbitrum Unique?
1)Optimistic Rollup Technology: It is a trust-minimised approach that relies on fraud proofs to ensure the integrity of transactions while minimising the amount of data that needs to be store on-chain. It also allows for faster and cheaper transactions on the Ethereum blockchain.

2)EVM Compatibility: Arbitrum is comptatible with EVM, which means that developers can easily port their existing smart contracts and dApps onto the Arbitrum network without having to make significant changes to their code.

3)Fast Finality: Transactions are confirmed within seconds rather than minutes, as is the case with the Ethereum blockchain. This allows for a much better user experience and enables dApps to be more responsive and interactive.

4)Lower Fees: Designed to be much cheaper than the Ethereum blockchain, with transaction fees that are a fraction of the cost of on-chain transactions. This makes it much more accessible to users who may have been priced out of using dApps on the Ethereum blockchain.

5)Interoperability: Designed to be interoperable with other blockchains which means that it can be used to facilitate cross-chain transactions and interactions between different blockchain networks. This makes it possible for users to access a wide range of decentralised services and applications, regardless of which blockchain they are built on.

All Hail the Airdrop
In partnership with Offchain Labs, The Arbitrum Foundation has announced the airdrop of a governance token for Arbitrum and the distribution of the token to the Arbitrum community of users and stakeholders.

This highly anticipated airdrop is on 23 March and has been generating a great deal of excitement among the cryptocurrency community. This move comes as part of the platform's transition to a decentralised autonomous organisation (DAO) model.

Just over a billion tokens will be airdropped to more than 600,000 wallet addresses.

·Maximum airdrop entitlement: 10,250 tokens

·Minimum airdrop entitlement: 625 tokens

The transition into a DAO model will enable ARB holders to be able to participate in voting on essential decisions and submit improvement proposals regarding the platform's development and management.

Despite it being designed to be decentralisation, the platform has been under the sole control of Offchain Labs since its launch. After the introduction of the ARB governance token, the reigns of the protocol will shift and be in the hands of its community.

Arbitrum noted that, "The hope and intention is that by distributing to Arbitrum DAOs, we're able to spread governance power more widely amongst users than solely allocating to those who were eligible for the airdrop." On its website, it also mentions that "Users across the ecosystem will be given voting power. 11.62% of tokens will be initially distributed to users and 1.13% will be distributed to DAOs in the Arbitrum ecosystem."

Am I Eligible for the ARB Token?
The airdrop is naturally not a free-for-all buffet. Users need to have used Arbitrum and interacted with blockchain with several specific criteria. Arbitrum collaborated with Nansen to determine ARB token eligibility based on user activity.

To find out if you are eligible, you can visit Arbitrum Foundations' website. You will be notified of your eligibility after connecting your wallet. Then, you will see the number of tokens you can claim.

If you are eligible, congratulations! Your display screen will look like the image on the left. Unfortunately if you are ineligible, your display screen will show the image on the right. (See below for reference)

What is Next Then?
After the upcoming airdrop, the responsibility to distribute the remaining community tokens gradually will be on the Arbitrum Foundation and DAO.

The goal is to decentralise its networks and allow the community to be in control of Arbitrum's ecosystem and technology. Based on nftnow, "the airdrop and DAO are only two of its many plans to grant all sub-communities a voice. Additionally, all investor and team tokens are subject to four-year lockups. The first unlock will happen in one year, with monthly unlocks for the remaining three years.”

In conclusion, Arbitrum is a groundbreaking technology that has the potential to transform the world of DeFi. Its innovative approach to scalability has already garnered significant interest from users and developers. The upcoming airdrop is bound to generate even more excitement. As the cryptocurrency landscape continues to evolve, Arbitrum is poised to become a major player in the space.