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Arbitrum (ARB): the governance token of an optimistic rollup

Offchain Labs’ Ethereum L2 and the key to the Arbitrum DAO

Arbitrum is a layer-2 (L2) network that processes Ethereum transactions off the main chain and records the results on Ethereum, and ARB is the voting token of the Arbitrum DAO, which sets the network’s rules and spends its treasury. Fees on Arbitrum are paid in ETH, so ARB is a ballot rather than a fuel.

1. Who built it

Arbitrum grew out of research at Princeton University and is developed by Offchain Labs, founded in 2018 by Ed Felten, Steven Goldfeder and Harry Kalodner. Its main network, Arbitrum One, opened to the public on August 31, 2021.

ARB arrived with a user airdrop on March 23, 2023. The initial supply was 10 billion, and the DAO may vote to mint up to 2% more each year. Holders vote on DAO proposals directly or by delegating their votes to someone else.

2. How it works: an optimistic rollup

Arbitrum is an optimistic rollup: transactions are assumed valid when posted, but anyone can prove one wrong within a set challenge window and have it corrected. A sequencer, the operator that orders transactions, batches and executes them and posts compressed transaction data to Ethereum. Because of the challenge window, withdrawing to Ethereum through the official bridge takes about a week.

The Nitro upgrade in August 2022 rebuilt the stack around Geth, the Ethereum client, and Stylus added the ability to write contracts in languages such as Rust and C++ in 2024. In February 2025 BoLD made challenges open to anyone, and in April 2025 Timeboost began auctioning priority in transaction ordering.

3. Ecosystem and milestones

Arbitrum One hosts many exchanges, lending markets, derivatives platforms and games, and Orbit chains use Arbitrum technology to launch chains of their own. In June 2025 the US trading app Robinhood announced it would build its own L2 for tokenized stocks on Arbitrum technology. On the Crypto Nation map, ARB is the city-hall tower of Arbitrum One, surrounded by tokens issued on Arbitrum.

The Arbitrum DAO controls a large treasury held in ARB and has funded programs for games, DeFi and other growth projects. Decisions are made by votes of ARB holders and their delegates, and some can change the chain’s rules through contracts on Ethereum.

4. Things to know

The sequencer is still run by Offchain Labs. Users can force a transaction in through Ethereum if the sequencer ignores it for long enough, but day-to-day ordering is decided by one party. A 12-member Security Council also holds emergency upgrade powers, which is why L2BEAT rates Arbitrum One as a ‘Stage 1’ rollup, one with meaningful but not complete user protections.

ARB does not share fee revenue, so its value rests mostly on governance rights and expectations about the ecosystem. The first DAO proposal, AIP-1, caused a backlash in April 2023 when it emerged that the foundation had started spending the budget before the vote. Tokens for early contributors and investors have also been unlocking every month since March 2024.

Written from information public up to October 2026. It does not recommend or rate any coin and is not investment advice. If something is wrong, please tell us through the contact page.