Arbitrum’s ARB airdrop allows voters to change their protocol

Layer to Rollup Arbitrum will broadcast its new ARB governance token to users amid a shift towards decentralized governance in the congested rollup market.

The Arbitrum Foundation will launch a new token that will allow holders to vote on changes to the Arbitrum protocol.

Arbitrum transitions to decentralized governance through the ARB token

The Foundation will circulate 44% of the new ARB tokens to investors and core contributors and 56% to the Arbitrum community in approximately seven days.

arb delivery
ARB Token Distribution | Source: Arbitrum Foundation

The token distribution means Offchain Labs will no longer control Arbitrum, the company co-founded by former Princeton lecturer Ed Felten and two graduate students. Instead, it will become a Decentralized Autonomous Organization (DAO).

Arbitrum used analytics firm Nansen to distribute tokens according to user transactions, dapp usage and time spent. A total of 10 billion tokens will be distributed.

Holders of ARBs can change the code directly, subject to the delay used for auditing the change. On the other hand, a security council can fix bugs more quickly.

Arbitrum’s One Network is a rollup on Ethereum that processes bulk transactions from the main chain and posts the results to the base layer.

When a user signs a digital transaction, it is sent to an Arbitrum node. The Arbitrum node will automatically forward the transaction to the Arbitrum sequencer. The sequencer will take transactions and others that happened around the same time and put them all in one batch. It will compress that batch using a common compression algorithm and post it as Ethereum call data on-chain.

Using Rollup increases the performance of Ethereum and reduces transaction fees for smart contract users.

ZK Rollup needs rapid developer adoption to challenge

The rollups are important for Ethereum’s scaling roadmap after the network transitions to proof-of-stake in September 2022.

Ethereum co-founder Vitalik Buterin has said that the rollup will be preceded by another scaling strategy called sharding in the short to medium term.

Generally, rollups come in two flavors, zero-knowledge rollups, such as those recently released by Polygon Labs and ConsenSys, and optimistic rollups, such as Arbitrum and Optimism.

Arbitrum’s One Network is an optimistic rollup that assumes that all transactions are valid without computation. There is a challenge window where anyone can question the validity of a transaction using fraud-proof.

With the transition to The DAO, Arbitrum is looking to build on its total value-locked Ethereum market share of $1.67 billion. The smart contract language of its Arbitrum virtual machine is compatible with Ethereum, making it easier for developers to migrate.

Arbitrum TVL
Arbitrum Total-Value-Locked | Source: Defilama

On the other hand, zero-knowledge rollups use cryptography to prove the validity of transaction data without revealing the data.

Ethereum infrastructure developer ConsenSys is in the early stages of developing its zero-knowledge rollup ecosystem. While no numbers are readily available on its developer community, ConsenSys offers a five-minute onboarding time for Ethereum developers to begin building on its Rollup.

Sidechain developer Polygon Labs has reached several zk rollup milestones, including over 5,000 smart contracts and 75,000 zk proofs. It has $1.03 billion locked up in its entire ecosystem, with the zero-knowledge Rollup mainnet beta set for release on March 27, 2023. It also seeks to attract Ethereum dApp developers by requiring minimal smart contract changes.

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