Arbitrum is a protocol that makes Ethereum transactions faster and cheaper. It does this by using two core protocols, Arbitrum Rollup and Arbitrum AnyTrust. Developers can utilize these protocols to build user-friendly decentralized apps with adequate scalability. Arbitrum has two main chains: Arbitrum One, which started in 2021 and uses the Arbitrum Rollup protocol, and Arbitrum Nova, which is based on the Arbitrum AnyTrust protocol and focuses on very low-cost transactions. In August 2022, Arbitrum One was upgraded to the Arbitrum Nitro stack, which increased its scaling capabilities by 7-10 times.
The distribution of the ARB governance token is important for decentralizing the governance of Arbitrum One and Arbitrum Nova, as well as their underlying protocols. This distribution allows ARB token holders to work together to shape the future of the Arbitrum ecosystem.
What is the Arbitrum token?
The Arbitrum One (ARB) token is a governance token that represents membership in the Arbitrum DAO (decentralized autonomous organization). ARB token holders can take part in the governance process by voting on proposals related to the development and management of the Arbitrum protocols and chains. Holding ARB gives token holders the power to influence the direction of the Arbitrum ecosystem and contribute to its decentralized future. The ARB token is different from ETH, Ethereum’s native token, in its purpose and function. While ETH is a transactional token used to pay for transaction fees on the Ethereum network, ARB is specifically designed for governing the Arbitrum protocols and chains.
What is Arbitrum’s Governance and How It Works?
Arbitrum’s governance is driven by two main governing bodies: the Security Council and the Arbitrum DAO.
The Security Council is a 12-member council elected by the Arbitrum DAO members. This council focuses on keeping the security and performance of the Arbitrum ecosystem by applying emergency actions when needed.
The Arbitrum DAO is the global community of ARB token holders and their chosen delegates. This DAO is in charge of governing Arbitrum and its Security Council. The DAO can change the Security Council’s powers or even remove them entirely through constitutional proposals.
ARB token holders can take part in the governance process by voting on proposals directly or by delegating their voting power to representatives who express their interests. This decentralized governance system ensures that decisions made within the Arbitrum ecosystem match the community’s finest interests, instead of relying only on a centralized group of decision-makers.
Conclusion
Arbitrum is a protocol that aims to improve the scalability and security of Ethereum transactions by using two core protocols, Arbitrum Rollup and Arbitrum AnyTrust, and two main chains, Arbitrum One and Arbitrum Nova. The protocol also has a governance token, ARB, that allows token holders to participate in the governance of the Arbitrum ecosystem and its underlying protocols. The governance is decentralized and driven by the Security Council and the Arbitrum DAO, which can vote on proposals related to the development and management of the protocol and its chains. Arbitrum is a promising solution for developers and users who want to leverage the benefits of Ethereum without compromising on speed, cost, or reliability.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2023/11/29/arbitrum-a-decentralized-protocol-for-scalable-secure-transactions/