Demystifying Arbitrum Rollup: A Comprehensive Guide for Beginners

Lana Sparrow -

Arbitrum is a leading layer2 scaling solution built to help Ethereum achieve faster transaction speeds, lower fees, and higher throughput without compromising on security or decentralization.

At its core, Arbitrum leverages an optimized rollup design that batches transactions off the Ethereum mainnet while still benefiting from its robust security model. There are two main rollup solutions under the Arbitrum ecosystem that help scale Ethereum in different ways:

  1. Arbitrum Public Chains
  2. Arbitrum Orbit Chains

Let's explore them both in detail:

Arbitrum Public Chains:

The Arbitrum public chains are general-purpose rollup chains capable of supporting a wide variety of dApps from DeFi to social media and gaming. The current live public chains are:

  • Arbitrum One - The original chain with over 500+ TPS throughput
  • Arbitrum Nova - Faster chain (2 sec blocks) built for DeFi apps
  • Arbitrum Nitro - Experimental chain with 20,000+ TPS performance

How do They work?

All three chains execute transaction logic and store data off-chain. Transaction batches are rolled up and posted to Ethereum, along with fraud proofs and checkpoints. This compresses the on-chain footprint, allowing more TPS.

Arbitrum One

Arbitrum One is the original public chain using the Rollup protocol. This protocol batches transaction data off-chain and posts the actual data directly to Ethereum Layer 1. All transaction history and chain states can be verified on Layer 1 to ensure trustlessness. This also allows Arbitrum One to inherit the full security assurances of Ethereum.

Arbitrum Nova

Arbitrum Nova also processes transactions off-chain but utilizes the AnyTrust protocol instead of Rollup. This introduces a Data Availability Committee (DAC), which stores the raw transaction data instead of posting it directly to Layer 1.

This enables expedited settlement of batches and thus reduces confirmation times and fees further. However, it does assume some additional trust in the DAC node operators.

Both these chains achieve faster, cheaper Ethereum transactions that are confirmed in seconds while still being secured by Layer 1. This makes them ideal for DeFi, gaming, NFTs, and other dApps planning to manage growth on Ethereum.

What about the traction?

Arbitrum One and Nova chains have already attracted over $2 billion in TVL from leading DeFi dapps. Developers are rapidly migrating for Arbitrum's order-of-magnitude improvements in speed, cost, and scale.

In essence, public chains act as performant priority lanes that avoid Ethereum congestion and high base fees without compromising decentralization or security guarantees that builders have come to depend on.

Arbitrum Orbit Chains:

While public chains target general usage, Arbitrum Orbit chains provide a more bespoke environment custom-optimized per each application’s unique needs. These chains settle to any of Arbitrum’s public chains, i.e., Arbitrum One or Arbitrum Nova.

Every Orbit chain runs as an independent sidechain with its own validators, governance model, upgrades process, trust assumptions, and parameters, all specifically configured for its use case.

This customizable approach allows teams to optimize performance, features, and experience for their individual workloads right from day one instead of relying on a generalized network roadmap.

Rollup Orbit Chains:

Rollup Orbit chains settle back into Arbitrum One public chain. They inherit the same trust assurances as layer 1 by posting transaction data on-chain, similar to AnyTrust chains.

AnyTrust Orbit Chains:

AnyTrust Orbit chains settle into Arbitrum Nova to benefit from much faster settlement. This does entail some additional trust tradeoffs via the DAC managing data availability.

When Should Each Be Used? If an application needs the full decentralization of Ethereum, Rollup Orbit chains are the best fit. However, AnyTrust Orbit chains are suitable for use cases willing to trade some trust for exponentially better performance and cheaper transactions.

Teams can leverage Rollup-as-a-Service (RaaS) providers for managed node infrastructure or Quicken for end-to-end orbit chain deployment. These services simplify the setup and operations.

Several gaming apps, fan communities, research projects, and enterprises are developing custom Orbit chains to meet specialized scaling needs. With Orbiter SDK allowing 1-click deployments, adoption is accelerating rapidly.

Benefits of Orbit Chains

Early adopters have tuned configurations to achieve sub-5 second finality, 50,000+ TPS throughput, high scalability, and other tailored metrics that public chains focused on wider compatibility cannot yet support.

These performant configurations are made possible because Orbit chains only have to support their own application-specific transaction volumes versus securing a multi-purpose chain.

However, despite functioning as customized sidechains, Orbit chains can still inherit Ethereum’s security by periodically batch-settling into a target Arbitrum public chain, which further settles to Layer 1 mainnet. This gives them the best of both isolation and battle-tested consensus.

Interoperability between Orbit chains is facilitated by Arbitrum’s AnyTrust messaging to move assets and data trustlessly across chains. Bridges can also connect Orbit chains outward to external public blockchains.

Conclusion

Arbitrum rollups enable scaling Ethereum for global adoption by combining off-chain speed with on-chain security. Public chains act as performant L2 overlays for general usage while Orbit chains provide the flexibility to hyper-customize configurations for more niche requirements.

Together, they expand Ethereum’s capabilities to support the next generation of tokenized economies across DeFi, social, gaming, and enterprise verticals.