One of the most popular Ethereum scaling solutions, Arbitrum aims to speed up transaction times and cut fees on the Ethereum blockchain.

The Ethereum network has a lot going for it-it's decentralized, reliable, supports smart contracts written in a programming language familiar to many crypto developers, and is home to a thriving decentralized finance (DeFi) industry.

However, Ethereum is also slow and expensive to use, and will remain so unless users opt to move to another blockchain (like Solana, Fantom or Avalanche), or until planned Ethereum upgrades speed things up within the next couple of years.

While the world waits, a third fix has arisen: scaling solutions. These are pieces of software that sit atop the base layer of a Blockchain, in this case Ethereum, to speed things up. Arbitrum is one such scaling solution, and it's become a popular venue for Ethereum users to complete their transactions.

On March 23, 2023, Arbitrum plans to airdrop its new ARB token, allowing holders to vote in decisions related to the protocol. In so doing, Arbitrum is enacting its long-awaited transition to a DAO (decentralized autonomous organization).

Arbitrum is cheap and quick to use, and relays all transaction information back to the main Ethereum blockchain. While Ethereum manages a mere 14 transactions per second, Arbitrum races ahead at 40,000 TPS. Transactions cost several dollars to complete on Ethereum, while they cost about two cents on Arbitrum.

And Arbitrum also supports the Ethereum Virtual Machine (EVM), meaning that Ethereum DeFi developers can integrate their decentralized applications (dapps) with Arbitrum without having to make any modifications.

Arbitrum was created by Offchain Labs. The company raised $120 million in a Series B funding round in September 2021.