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Arbitrum Bridge Review 2024: What We Do and Don’t Like
Swen Keller
- URL: https://bridge.arbitrum.io/
- Year Founded: 2021
- Native Token: ARB Token
- Supported Assets: ETH and ERC-20 tokens
- Supported Networks: 15+ including Ethereum, Polygon, Avalanche, BNB Chain, and Canto
- Fees: Dynamic fees ($0.25 on average)
Arbitrum Bridge Review: Our Take
Arbitrium Bridge is a cross-chain bridge solution that offers a ton of benefits to the otherwise “troubled” Ethereum mainnet such as reduced gas fees, quick transaction speeds of up to 40,000 TPS, high Ethereum Virtual Machine compatibility, and interoperability with Ethereum mainnet.
That said, there are a couple of constraints such as reliance on validator trust, validator operation influence, and potential latency issues because of the layers of complexity involved.
What is Arbitrum Bridge and How Does it Work?
Arbitrium Bridge is a solution that connects Ethereum’s mainnet known as Layer-1 with the Arbitrium Roll-up (Layer-2), which allows users to transfer ETH and ERC-20 tokens between Layer-1 and Layer 2 (bridge assets) from Ethereum to Arbitrum and other supported chains. Arbitrum is designed to enhance the performance of smart contracts and decentralized applications on the Ethereum blockchain.
To use the Arbitrium Bridge you can either add Arbitrum Nova or Arbitrium One to your digital wallet like MetaMask and then bridge your ETH tokens from the source chain to the destination chain.
For how it works, the Arbitrium Layer 2 network boosts the efficiency of transactions by taking them off the Ethereum mainnet.
Now, while a lot of Layer 2 scaling solutions use a single mainnet, Arbitrium utilizes 2 mainnets (Arbitrum One and Arbitrum Nova).
These 2 mainnets work a bit differently, Arbitrum One makes sure that transaction data posted on it is valid via multiple-round interactive optimistic rollups. The rollups optimistically believe that the data posted is accurate by default.
To foster transparency it permits users to challenge the accuracy of data in a particular period. If any user challenges data validity, the validators and challengers will need to resolve it on Layer 1.
Using its multi-round interactive rollups, Arbitrium One makes sure that disputes are resolved on Layer-1 at cheaper transaction costs.
On the other hand, Arbitrium Nova utilizes the AnyTrust model to make sure the data being sent from the source chain to the destination chain is correct and provides very low transaction fees using the new security model termed Data Availability Committee (DAC).
This is done by the Sequencer batches compressing transaction data and submitting it to the Data Availability Committee for a certificate.
The Data Availability Committee (DAC) certificate ensures that the transaction is right. If the Data Availability Committee (DAC) is unable to generate a certificate for a batch of transaction data, it will fall back to Rollup and post the compressed data to Ethereum.
Pros
- Supports 2 Mainnets (Arbitrum One and Arbitrum Nova)
- Quick transaction speeds
- Reduced gas costs
Cons
- Reliance on validator trust
- Potential latency problems
Unique Features
Arbitrum Governance
The Governance of Arbitrum is handled by 2 governing bodies, the Arbitrum DAO and the Security Council.
The Security Council consists of 12 members elected by the Arbitrum DAO. The Council is responsible for ensuring the security and performance of Arbitrum.
Just like most decentralized finance, Arbitrum DAO, on the other hand, is the worldwide community of ARB token holders and the delegates they select. The DAO is responsible for the governance of Arbitrum and the Security Council. The power of the Council and even its existence are determined by the DAO.
Since the DAO is open to all token holders and not controlled by the founders of the protocol, the DAO can democratically make decisions that are in the best interest of the Arbitrum Community.
That said, the DAO is governed by the Constitution of the Arbitrum DAO.
Cryptocurrencies Available on Arbitrum Bridge
The Arbitrum bride supports a wide range of assets. It supports all ERC-20 tokens on L1 that are not registered to a gateway. All such tokens can be permissionless bridged from Ethereum to Arbitrum and other supported chains through the Standard ERC-20 Gateway.
Supported Cryptocurrencies include Wrapped Ether (WETH), Tether USD (USDT), USDCoin (USDC), XEN Crypto (XEN), Blur (BLUR), XONE, Tеthеr UЅD (UЅDТ), ChainLink Token (LINK), AirTor Protocol (ATOR), Dai Stablecoin (DAI), Еthereum (ЕТН), SHIBA INU (SHIB), Squid Grok (SquidGrok), Matic Token (MATIC), Wrapped BTC (WBTC), Changpeng Zhao (CZ), ApeCoin (APE), Gala (GALA), Decentraland (MANA), Binance Coin (BNB), Dai (DAI), Avalanche (AVAX), etc.
Networks Available on Arbitrum Bridge
The Arbitrum Bridge currently supports over 15 blockchain networks. Supported networks include Ethereum, Polygon, BNB Chain, Avalanche, etc.
Arbitrum Bridge Fees
The Arbitrium Bridge charges an average of $0.25 when you bridge assets from Ethereum to Arbitrum and other supported chains, however, fees charged when using the solution are dynamic and can change due to network congestion.
That said, the Bridge saves up to 95% in gas fees when compared to the Ethereum network providing ultra-low transaction fees.
Is Arbitrum Bridge Safe?
Based on our team’s first-hand trials with Arbitrum Bridge we can confirm that it is a safe crypto bridge for bridging tokens from Ethereum to Arbitrum and other chains. It however has a history of security breaches.
The Arbitrum Bridge is backed by Ethereum’s robust security model which ensures that assets being transferred on the bridge are as safe as the Ethereum network.
Arbitrum runs in a permissionless environment, which means that anyone can become a validator and contribute to the security of the system.
Validators are required to stake their crypto assets to ensure compliance with network rules.
That said, even if validators decide to act maliciously, Arbitrum Bridge has mechanisms in place to rapidly detect and correct any irregularities hence preventing the loss of assets.
While Arbitrum supports the movement of assets from Ethereum to Arbitrum, it also, supports the moving back of assets from Arbitrum to Ethereum, the security mechanisms in place will delay such transactions to ensure the preservation of the security of the assets.
That said, in September 2022, a white hat hacker discovered a multimillion-dollar vulnerability on the Arbitrum Bridge.
If this vulnerability had been discovered by a malicious actor, they would have been able to hijack all the ETH deposits on the Arbitrum Bridge.
Arbitrum responded swiftly and fixed the issue before anyone could exploit it.
However, in April 2023, a hacker exploited an Arbitrum Bridge contract and hacked the Web3 game Tales of Elleria.
The hacker minted 5 billion Ellerium (ELM) tokens and drained the liquidity pool. Over 140 ETH was lost to the hack.
Liquidity Provider Yields
The Arbitrium ecosystem rewards liquidity providers by offering an average of 15.69% in annual yields.
Arbitrium Native Token (ARB)
The native token of the Arbitrium Bridge is ARB, an ERC-20 governance token that is designed to enhance scaling solutions for Ethereum.
Holding the ARB token enables holders to transfer value from Ethereum to Arbitrum, participate in the Arbitrium ecosystem, and vote on governance decisions.
ARB can be used to vote in governance decisions concerning the development of the ecosystem.
The ARB token was launched on March 23 2023 and has a maximum supply of 10 billion ARB tokens with a 2% yearly inflation rate.
At its launch, 11.62% of the token’s total supply was airdropped to early supporters, and 1.13% of the total supply was airdropped to developers building apps on Arbitrum.
This equates to a total circulating supply of about 1.275 billion ARB tokens.
The current market capitalization of ARB is $1,349,435,474.00 while the 24-hour trading volume is $195,339,046.00.
Below is a breakdown of ARB token allocation:
- 42.78% to the Arbitrum DAO treasury
- 26.94% to the Team and Future Team + Advisors
- 17.53% to Investors
- 11.62% to individual wallets (Airdropped)
- 1.13% to DAOs in the Arbitrum Ecosystem.
As already stated, the ARB token grants token holders access to participate in the governance of the ecosystem via the Arbitrum DAO.
The DAO makes decisions and votes on important aspects of the protocol such as technical changes, investments in the ecosystem, and bridge funds allocation.
ARB token holders can also vote on the election of members into the protocol’s Security Council.
The Security Council is in charge of the treasury wallet and is made up of 12 members.
The Arbitrum token can also be used for staking and securing the Arbitrum network. Since ARB is the token that powers the Arbitrum ecosystem, users can stake their ARB token and contribute to the security and stability of the network.
Here is how it works: when ARB token holders stake their tokens, it can be likened to putting up a security deposit. This ensures that the network is reliable and trustworthy.
Validators who validate transactions and help secure the network are required to stake a certain number of ARB tokens as collateral.
The staked tokens act as an incentive to ensure that the validators act honestly and obey network rules.
Validators are rewarded for their services with additional ARB tokens.
Things We Do Not Like about the Arbitrium Bridge
There are 3 primary issues with the Arbitrium Bridge when you transfer assets from Ethereum to Arbitrum and other chains and these include the reliance on validator trust, the influence of validators on operations, and potential latency problems that can arise because of the layers of complexity involved.
Final Thoughts
Arbitrium Bridge enables cross-chain transfer for ERC-20 tokens and efficiently scales the Ethereum solution cutting down on transaction fees and increasing speed.
However, leveraging our expertise in cross-chain transfer solutions we found that Arbitrum has several challenges such as reliance on validator trust and validator power to affect operations.
This bridge is great for easy use and tech. But, our Orbit Bridge Review might show something that fits you better.
FAQ
Most frequent questions and answers
Arbitrium Bridge transactions can take anywhere from a couple of minutes to hours.
The main drawbacks include validator reliance and potential latency due to levels of complexity.
cBridge is arguably the best bridge.
Arbitrium is currently at the $1 mark, so to reach $100 it will need to rise by 8000+%, and the possibility of this happening quickly is slim.
We always try to provide the most accurate information available, and make sure our team follow through.
If you want to know more about our Crypto Exchanges Review Methodology follow the link below
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