Arbitrum Layer

Definition ∞ Arbitrum Layer refers to a scaling solution built on top of the Ethereum blockchain. It functions as a Layer 2 network utilizing optimistic rollups to process transactions off the main Ethereum chain. This approach significantly boosts transaction throughput and reduces computational costs compared to directly interacting with Ethereum. Arbitrum aims to provide a faster and more economical environment for decentralized applications and user activity.
Context ∞ The Arbitrum Layer remains a significant focus in discussions about Ethereum’s scalability, with ongoing developments in its ecosystem and competition from other Layer 2 solutions. Its performance and security audits are regularly reported, influencing market sentiment and adoption rates for decentralized finance protocols. Future upgrades often involve further decentralization and enhanced transaction processing capabilities.