Arbitrum

Arbitrum is an optimistic rollup that executes transactions off Ethereum while posting data back to it, so the base layer remains the source of truth. ARB is a governance token for the DAO that controls the protocol's parameters and treasury, not a gas token — transactions are paid in ETH.

Optimistic means assumed valid until challenged

Transactions are posted to Ethereum as data with an asserted result, and anyone may challenge that result during a dispute window. If nobody does, it stands. This is cheap in the common case because no proof is generated when everything is honest — the cost is a withdrawal delay while the challenge period runs.

Interactive fraud proofs narrow the dispute

Rather than re-executing an entire batch on Ethereum, challenger and asserter bisect the disputed computation until they isolate a single step, and only that step is verified on-chain. This keeps the cost of resolving a dispute bounded regardless of how much computation is in question.

Ethereum holds the data

Transaction data is published to Ethereum, so anyone can reconstruct Arbitrum's state independently even if every Arbitrum node disappears. This is the property that separates a rollup from a sidechain: the data availability guarantee is inherited rather than self-provided.

What ARB governs

The token votes on protocol upgrades, sequencer policy and a substantial treasury. It does not pay for gas and does not accrue fees automatically. Its value case rests on the governance rights and treasury it controls, which is a different proposition from a gas token with usage-driven demand.

The sequencer question

Ordering is handled by a centralised sequencer, which can delay but not falsify transactions — users retain the ability to force inclusion through Ethereum. Decentralising sequencing is the outstanding item on this and every optimistic rollup, and it is where the remaining trust assumption sits.