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ℹ️ The Arbitrum network is a layer-2 functionality, developed by the New York-based company Offchain Labs, which seeks to solve the congestion that the Ethereum network has been experiencing by improving how smart contracts are validated.

ℹ️ The platform leverages the security provided by the Ethereum mainnet but allows smart contracts to run on a separate layer to reduce congestion within the network.

ℹ️ This technique is called ‘transaction rollups’ (explained in some detail by the developers here) and consists of batches of transactions and records that are validated on the lower layer to then be moved to layer-1’s mainnet – in this case, the Ethereum mainnet.

ℹ️ Arbitrum compensates nodes that actively validate the smart contracts powered by the Arbitrum chain (known as aggregators) with ETH and they are responsible for adding the blocks to the first layer – the Ethereum mainnet.

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