Arbitrum One FAQ

Arbitrum One, in my opinion, is the most important smart contract platform release since Ethereum in 2015. Here are some details.

What is Arbitrum One?

Arbitrum One is a smart contract chain. It's just like Ethereum, has similar security properties to Ethereum, except it's much faster and cheaper.

If you want to dive into the technical details, Arbitrum One is an optimistic rollup. Here's a great video explaining how optimistic rollups work. For an even deeper dive, see Inside Arbitrum. For the normie user, this doesn't matter. All you need to know is it's a faster and cheaper version of Ethereum.

What's the difference between Arbitrum and Arbitrum One?

Arbitrum is the brand, Arbitrum One is a specific rollup chain. Reddit will have their own chain using Arbitrum technology.

How fast is Arbitrum One?

Transactions confirm within a second, so as close to instant as you can get! Really, most of this is latency is between your internet connection and Arbitrum One.

How cheap is Arbitrum One?

Gas fees will be anywhere typically between 90%-95% cheaper than Ethereum. So, if a transaction costs $20 on Ethereum, it'll cost anywhere between $0.40 and $2 on Arbitrum One. The exact number will depend on the type of transaction and the gas prices on Ethereum. As Arbitrum One matures, fees will lower over time.

Boo! That's not cheap enough!

I hear you. While 90+% cheaper than Ethereum is a tremendous improvement, and will be cheap enough for many, many more users, it's not enough for everyone.

Some may be wanting transaction fees in the $0.01 range. This will happen as Arbitrum One matures, and data shards release on Ethereum. It'll take a couple of years to realize the vision for global scale.

In the here and now, you'll have to use a sidechain like Polygon PoS - but be aware that it's far, far less secure or decentralized than Arbitrum One or Ethereum, so what you save in fees, you pay for in security. We will also see intermediate solutions over the coming months like validiums e.g. zkPorter and Immutable X, which offer sidechain-like fees, but far better security.

When can I use Arbitrum One?

August 31st!

How do I use Arbitrum One?

The same way use Ethereum! If you have used Ethereum sidechains like Binance Smart Chain, Polygon PoS, or Avalanche, you'll know exactly how this works.

The Arbitrum One Portal will be a great place to get started.

Go to Arbitrum (ETH) Blockchain Explorer (arbiscan.io) - which is the Etherscan for Arbitrum. At the bottom, you'll see "Add Arbitrum Network". This will add Arbitrum One to the web3 wallet of your choice (e.g. MetaMask). From there, you use the same address as you do on Ethereum, the same wallets, same everything.

Alternatively, the web UIs for your favourite dApps will also likely have options to switch to Arbitrum. For example, Uniswap has a guide for Optimism, something very similar will be live for Arbitrum One too.

How do I send my tokens to Arbitrum One?

You can bridge your tokens to Arbitrum One using the default gateway.

In addition, you will have multiple liquidity bridges like Hop Protocol, Celer cBridge, Connext and Biconomy that will not only allow you to bridge tokens between Ethereum, but also other chains like Polygon, Optimistic Ethereum etc.

Furthermore, major CEXs like OKEx, Huobi and Coinbase have committed to offer direct withdrawals to Arbitrum One. So, you'll never have to use Ethereum and can totally bypass the high fees there! Of course, it'll take some time for all of this infrastructure to mature, but it's happening.

What can I use on Arbitrum One?

One of the reasons I call Arbitrum One the most important smart contract chain release since Ethereum is because of its expansive developer adoption. Most of the bluechip projects - Uniswap, Chainlink, Maker, Aave, Curve - you'll find them on Arbitrum One from day 1! There are over 400 projects set to release on Arbitrum One, with many more live over the coming weeks. Nowhere will you see such a vibrant ecosystem of top tier dApps outside of Ethereum itself.

How do I pay fees on Arbitrum One?

You pay fees in ETH! No friction, no needing to buy a random token to pay fees.

OK, sounds good, but I can't find Arbitrum on Coingecko?

Arbitrum does not have a token. You just use ETH. I presume this is why it's so underhyped and underrated.

What are the caveats?

Long term, there's only one major caveat - withdrawing your tokens from Arbitrum back to Ethereum takes 7 days. However, you can easily use the liquidity bridges or CEXs to withdraw instantly. It's not suitable for NFTs, though - we'll see NFTs adopted on zkRollups like zkSync, Immutable X and Loopring instead which don't have this caveat. In the future, I expect Arbitrum will also offer zkRollup solutions.

Short term, there are many caveats that you must be aware of. Arbitrum One is launching with multiple training wheels - there are multiple centralized aspects to Arbitrum One, chiefly upgradable L1 contracts and centralized sequencer. It's also cutting-edge tech, and there may be bugs and vulnerabilities. Only ape in with money you're willing to lose. However, all of these will be mitigated in the coming months as Arbitrum's top priority is progressive decentralization and general protocol maturity.

Bonus questions:

What if Arbitrum One is congested? (by u/newtosh, u/fiah84)

Arbitrum One uses an EIP-1559-like mechanism, where the transaction fees will start rising if it gets congested.

Running another fast chain like Arbitrum One can't be very cheap, do you know how offchain labs plans to monetize it? (by u/fiah84)

When Arbitrum One scales past Ethereum, it'll definitely be much more expensive to run an Arbitrum One node than Ethereum. Fortunately, because it leverages Ethereum's security, it's acceptable for Arbitrum One to be more expensive as you need much fewer nodes running (one honest sequencer and one honest validator is enough, but for resilience there'll be a few dozen, instead of thousands). End users can always verify directly from Ethereum - as all the transaction data is present in compressed form. Long-term, they can also use techniques like state expiry / regenesis to keep their nodes running efficiently - there's always a fallback state available for reconstruction from Ethereum.

As for monetization, when you pay transaction fees on Arbitrum, a portion of it goes to Arbitrum, the rest is paid to Ethereum for security and data availability. That's how the network monetizes itself. Also, I'll note that Offchain Labs are working on decentralizing Arbitrum One, so the transaction fees will go to the network - sequencers and validators, possibly even a treasury - not just Offchain Labs. The exact mechanism for how the revenues will be decided as the network decentralizes.

So fees will go to validators and other machines that help run the chain. Will it be possible to set up and run servers for profit and supporting the arbitrum chain? (by u/pikag)

For the first part, see above. Without going into too many details, yes, you'll be able to run sequencers once decentralized, though the details are pending. Also, there are validators, but these are specialized roles quite unlike validators on L1s. You can read about the details here.

Is this a centralized or decentralized solution? What happens when Arbitrum as an org, goes under? (by u/benaffleks)

In the short term, it's a semi-de/centralized solution. However, this is entirely due to it being brand new tech, and training wheels required.

Offchain Labs is focused on progressive decentralization, so in the future, it'll be a fully decentralized solution. Even if Arbitrum One fails, as a decentralized solution, you can still exit with your funds directly from Ethereum L1 - this is why we say it's materially as secure as Ethereum.

Given that the sequencer will be centralized at release, isn't there a risk that Arbitrum do not process certain transactions like withdrawals and your funds get stuck? (by u/ZougTheBest)

Different rollups have different exit mechanisms if the sequencer censors you. Arbitrum was initially designed without a sequencer model - it was actually one of the last things to be added. As a result, Arbitrum has one of the simplest ways to exit: you can bypass the sequencer and submit your transactions directly to the regular inbox.

Can you build a rollup on top of a rollup? Could this make cheaper transactions in case sharding never happens? (u/Datacruncha)

No, but you can have multiple rollups in parallel. There's a reason why it's called Arbitrum One! Indeed, next up will be Arbitrum Reddit - or whatever they call it. This won't reduce transaction fees significantly overall. What will is massively greater data availability on Ethereum when data shards release, as covered above.

With all these rollups competing there is going to be fractured liquidity among them right? Any solution to this? (by u/Phenozd)

Yes, but in reality, the situation is nuanced. The lower fees and higher transaction throughput will simply onboard new users and new liquidity that didn't exist before, so it's a net gain. Multiple projects are working hard on interoperability between rollups, and we have brilliant solutions like dAMM being developed that lets zkRollups share liquidity! Note: dAMM won't work with Arbitrum One - only zkRs.

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If there are any more questions, feel free to ask, I'll add them in here to the best of my knowledge! I am not affiliated with Offchain Labs and Arbitrum in any way, so please correct me if I'm wrong anywhere.

PS: Everything I write is in the public domain - feel free to share, repost, adapt as you please. I'll only post this on r/ethereum and my blog - the rest is fair game!