Arbitrum Scaling Solution: Everything You Need To Know

A big problem of the Ethereum blockchain is speed. The blockchain can only facilitate a certain number of transactions at a time, and when this number is exceeded, other transactions form a queue. This could lead to some inconvenient situations. 

For example, some dApps, such as Farmers World require transactions to be completed in real-time. If these transactions aren’t completed in real-time (or a close approximation), they could render the dApp worthless. The congestion on Ethereum means that these transactions could be delayed by a considerable period of time.

Such dApps now have to endure that delay because of Ethereum’s popularity. There are more dApps on Ethereum now, and transaction delays have only grown. That means more transactions are being loaded into the chain, and it’s taking even more time for these transactions to be completed. 

There are two proposed solutions for this congestion problem on the Ethereum chain. The first solution to this problem is to embrace sharding. That is, the Ethereum chain will be split into multiple shards, which should theoretically increase the capacity of the chain to complete transactions. 

However, sharding the Ethereum network is a long and complicated process. While it already exists right now, it’s not yet at a scale where it will necessarily impact transaction time. This means that dApps that want faster transaction time need to look for another immediate solution. 

The second solution for this decongestion is off-chain data confirmation. This means relaying the smart contracts to an off-chain solution that confirms it and then adds it to the Ethereum chain at a later date. 

This method of confirming transactions is called roll-up. According to Ethereum, rollup solutions perform transactions outside the Ethereum blockchain and then post the data to the chain where consensus is reached. 

This means that certain transactions can be confirmed in real-time, while consensus over the transaction will be reached on the Ethereum main chain at a later point. Since the transaction data is included in the layer 1 blocks, the transactions retain an equal level of safety as directly confirmed transactions. 

These rollups are performed by layer 2 chains, and Arbitrum is one such chain.