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introduction.md

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Header

This is the course header. This will be added on top of every page. Go to DoDAO.io to know more.

Introduction

What is Arbitrum

Arbitrum is a Layer 2 scaling solution designed to enhance the Ethereum blockchain's scalability and efficiency. It processes transactions separately from Ethereum's main chain and utilizes Rollup technology to combine multiple transactions into one, increasing throughput and reducing costs. Arbitrum maintains compatibility with Ethereum's existing tools and smart contracts, allowing for straightforward application deployment. Developed by Offchain Labs, it includes the Arbitrum One mainnet, which supports smart contract execution with Ethereum network validation. The use of Arbitrum significantly lowers transaction fees, making it a cost-effective alternative for running decentralized applications and smart contracts compared to Ethereum's mainnet.

What is Layer 2

Layer 2 refers to a secondary framework or protocol that is built on top of an existing blockchain system, known as Layer 1. The primary purpose of Layer 2 solutions is to address the scalability and performance issues of the main blockchain by handling transactions off the main chain. This allows for faster processing times and reduced transaction costs, without compromising the decentralized security model of the underlying blockchain. Layer 2 solutions include various technologies such as state channels, sidechains, and rollups, each with their own approach to off-chain transaction handling and subsequently settling the final state on-chain.

Benefits of Layer 2

  1. Increased Transaction: Throughput By handling transactions off the main chain, Layer 2 can process many more transactions per second than the base layer, alleviating congestion.

  2. Reduced Costs: Transactions on Layer 2 typically incur lower fees because they minimize the demand on the network's main chain resources.

  3. Improved Speed: Transactions can be completed faster on Layer 2, as they are not subject to the longer processing times of the main chain.

  1. Enhanced Scalability: Layer 2 can scale independently from the main chain, allowing the network to support more users and applications without a proportional increase in transaction costs or times.

  2. Maintained Security: Despite processing transactions off-chain, Layer 2 solutions typically inherit the strong security guarantees of the underlying main chain.

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