1. Introduction to Arbitrum
💡 Welcome to the Premia Blue Arbitrum Odyssey!
Welcome, Recruit! In this article, you will learn about:
- What Arbitrum is
- Arbitrum Nova
- What Layer 2 rollups are
- The Arbitrum rollup
What is Arbitrum?
Welcome to Arbitrum One: an advanced, ultra-efficient Ethereum Layer 2 rollup, that also acts as the home of Premia Blue.
We all know the pain: as Ethereum gains traction, gas fees skyrocket. With this increasing demand, conducting transactions becomes sluggish and cumbersome. Layer 2 solutions like Arbitrum come to the rescue, amplifying the capabilities of Ethereum’s secure and robust mainnet.
In plain words, Arbitrum operates like an auxiliary blockchain, replete with its own app universe. The magic lies in its intrinsic compatibility with Ethereum, ensuring developers can effortlessly port applications from Ethereum straight to Arbitrum. For users, transitioning is as simple as bridging assets.
To the everyday user, it feels remarkably like Ethereum - with amplified speed and affordability! But what’s the wizardry behind the scenes, and what tech magic fuels this solution?
Arbitrum One: With over $2.2b in Total Value Locked and at times over $500m in daily trading volume, Arbitrum acts as the premier DeFi hub for Ethereum.
Arbitrum Nova is Arbitrum One's ultra-low transaction fee sibling that also houses Premia Blue's peer-to-peer RFQ messaging network, powering an on-chain options orderbook!
In essence, Arbitrum Nova is a high-performance alternative to Arbitrum One's chain. While Arbitrum One implements the purely trustless Rollup protocol, Arbitrum Nova implements the mostly trustless AnyTrust protocol, which strikes a balance between centralization and performance.
Nova is to gaming and social apps what One is to DeFi: cheaper and faster than Ethereum while providing the required tradeoffs between high throughput, security, and trustless-ness.
As mentioned above, the key difference between the two Arbitrum chains is that One implements a trustless Rollup, while Nova implements a mostly trustless AnyTrust protocol. As opposed to posting transaction data on-chain, Nova posts it to a Data Availability Committee to find the perfect balance between decentralization and astronomically low transaction fees.
To learn more about Arbitrum Nova and AnyTrust, check out the Arbitrum docs!
Arbitrum Nova: The key technical difference is that Arbitrum One is permanently hosting transactional data in Ethereum, while Nova uses a data availability committee.
How Does Premia Blue Utilize Arbitrum?
Thanks to its low fees, fast transactions, and developer-friendly environment, Arbitrum One has grown to become the home stadium of DeFi protocols over the past 2 years.
For a complex protocol like Premia Blue which requires multiple transactions for managing options positions from open to settle, Arbitrum One was the obvious choice. Also, as Arbitrum is the hub for all things DeFi, the composable parts of Premia Blue - such as the Vaults and RFQ network - will be able to shine the brightest.
Speaking of the RFQ network - as mentioned earlier, it lives on Arbitrum Nova! Not only is Nova highly useful for web3 games and social apps, it also happens to be perfect for powering Premia Blue's peer-to-peer messaging network and options orderbook.
Arbitrum Rollup: A rollup mechanism which allows for efficient transaction verification, balancing trust and computational efficiency.
Where does Premia Blue's options orderbook live?