Arbitrum, a top layer-2 network developed to improve Ethereum’s efficiency and scalability, has seen massive traffic since 2023. It’s known for processing transactions at low costs and fast speeds.
Arbitrum is powered by its native token, ARB. Holders of this crypto are key players in the protocol’s governance system.
If you want to know more about Arbitrum and how to purchase ARB, we advise you to read this guide.
Arbitrum Explained
As mentioned, Arbitrum is an Ethereum layer-2 network intended to handle significant transaction volumes off-chain before sending them back to the Ethereum blockchain. Like other layer-2 solutions, Arbitrum seeks to reduce congestion and speed up transaction processing on the Ethereum mainnet while ensuring users do not pay high transaction fees.
How Does Arbitrum Work?
To minimize transaction costs, Arbitrum bundles multiple Ethereum transactions and processes them off-chain. Once these transactions are processed, they are grouped into rollup blocks and sent to the Ethereum mainnet for validation.
Arbitrum’s Key Features
These are the features that enable Arbitrum to perform its activities:
Optimistic Rollups
These rollups assume that all Ethereum transactions are valid. It is the duty of Ethereum validators to confirm the validity of the transactions in each rollup block.
Arbitrum Virtual Machine
Like the Ethereum Virtual Machine (EVM), the Arbitrum Virtual Machine powers smart contracts. Moreover, it allows Arbitrum-based decentralized apps to interact with those compatible with the EVM.
The Nitro Upgrade
This upgrade enables Arbitrum to integrate Geth and utilize Go code, thus improving transaction processing speeds and reducing gas fees.
The ARB Token
As stated, ARB powers the Arbitrum network. Although this ERC-20 token plays a major role in the Abitrum ecosystem, it cannot be used to pay gas fees. Instead, it serves as a governance cryptocurrency, allowing holders to vote on important decisions that shape Arbitrum’s future.
ARB’s Tokenomics
ARB’s maximum supply stands at 10 billion tokens. As of September 2024, there are about 3.49 billion ARB tokens in circulation, boasting a market cap of $1.7 billion, according to data from CoinGecko.
Here is how the Arbitrum team allocated ARB:
1. Investors received 17.53% of ARB’s total supply.
2. Decentralized Autonomous Organizations on Arbitrum shared 1.13% of the total supply.
3. Arbitrum’s DAO was allocated the largest share (42.78%).
4. Contributors received 11.61%.
5. The Arbitrum team allocated itself 26.94%.
Where Do You Buy Arbitrum (ARB)?
While you can trade ARB on decentralized exchanges (DEXs), we recommend purchasing the token on a centralized exchange (CEX) if you are a beginner. That’s because CEXs tend to offer a convenient way to trade cryptocurrencies.
These are some of the exchanges to consider when looking to buy Arbitrum.
OKX
This exchange adopts a simple interface to allow both novice and experienced users to navigate the crypto markets with ease. Moreover, it boasts high liquidity, enabling traders to buy ARB quickly.
Compared to its competitors, OKX charges reasonable fees of 0.1% per trade. As of September 2024, the centralized exchange has a presence in 102 countries.
Coinbase
If you are in the United States, the recommended CEX for buying ARB is Coinbase. But why do we recommend it? Firstly, it has deep liquidity and employs stringent security protocols to keep customer funds safe. Secondly, Coinbase follows stipulated rules, allowing traders to trade ARB in a regulated environment. Lastly, the CEX has multiple educational resources that help users understand Arbitrum and other cryptocurrencies before investing.
Expect a trading fee of up to 0.4% when purchasing ARB on Coinbase, now present in 106 countries.
How to Purchase ARB
Buying ARB involves simple steps, including:
1. Select a CEX. When doing so, consider factors like ease of use and trading fees.
2. Create an account. Your CEX will require you to register an account using your email or phone number.
3. Verify your account. To buy ARB, you must become a verified user. Verifying your account involves submitting your government-issued ID card or driver’s license.
4. Fund your CEX account. Use your CEX’s payment methods to buy USDT, the leading stablecoin by market cap.
5. Buy ARB. After funding your account, visit the spot market and search for the ARB/USDT trading. Next, place a buy order to swap USDT for ARB.
The purchased ARB tokens will be transferred to your account within a few minutes. We advise withdrawing them to a non-custodial wallet like MetaMask for safety purposes.
