The basics
Arbitrum was launched in August 2021 by Offchain Labs, and has its own cryptocurrency since March 2023 called ARB. It is a layer 2 scaling solution for Ethereum that focusses on security, scalability and compatibility. Arbitrum uses optimistic rollup technology to process transactions off-chain, which allows it to offer significantly faster transaction speeds and lower fees than Ethereum mainnet. It uses AVM (Arbitrum Virtual Machine) which is a custom virtual machine that was created for the Arbitrum Layer 2 scaling solution. The AVM is designed to be fully compatible with the Ethereum Virtual Machine (EVM), but it also includes a number of optimizations that make it more efficient and scalable. In addition to scalability and compatibility, Arbitrum is also focused on decentralization. The Arbitrum network is secured by a decentralized network of validators, and it is governed by a DAO (decentralized autonomous organization). This ensures that Arbitrum is not controlled by any single entity.
Mainnet and Testnet
SettleMint supports, the Arbitrum One Mainnet and the Arbitrum Goerli Testnet .
The Mainnet is the primary public Arbitrum production blockchain, where actual-value transactions take place. Each transaction requires payment of a transaction fee, payable in the native coin ARB. The Testnet is an instance of the blockchain to be used for testing and experimentation. There are also coins used in the Testnet but they have no value, so there is no risk of real fund.
You can consider the Testnet as a prototype and the Mainnet as the official production blockchain. Or think of this as an analog to production versus staging servers.
Consensus mechanism
The Arbitrum consensus algorithm is a hybrid system that combines optimistic rollups with a sequencer. Optimistic rollups assume that all transactions are valid unless proven otherwise, which allows transactions to be processed off-chain, resulting in faster and cheaper transactions.
The sequencer is a node that is responsible for proposing batches of transactions to the Arbitrum network. The sequencer is not trusted by the network, and any node can challenge the sequencer's proposal if they believe that it contains invalid transactions.
The Arbitrum consensus algorithm is scalable, secure, and decentralized. However currently it has a seven-day withdrawal period and relies on a centralized sequencer, but the team is looking into creating a decentralized sequencer and reduce the withrawal period to two days.
More information can be found on the official Arbitrum website.