A Closer Look at Abitrum: What You Should Know
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This is a layer 2 blockchain that was developed to boost scalability on the Ethereum blockchain. Abitrum makes it possible for one to do just about everything on the Ethereum network at a lower cost and with increased transaction speed.
Presently, the Ethereum blockchain can handle just 20–40 transactions in one second. Consequently, this subjects users to competition when the limit of the blockchain is exceeded. Subsequently, this causes the gas charges to increase. So, Abitrum brings increased scalability, handling up to 40.000 transactions per second. Abitrum achieves this by leveraging optimistic rollups, which can increase the speed of transactions at minimal charges.
Abitrum’s Mode of Operation
Abitrum’s function is based on a technology referred to as optimistic rollups, which is a type of data compression method for blockchain transactions. This technology rolls up a collection of data into a transaction. The advantage here lies in the fact that the blockchain only needs to process the rollup transaction, and won’t have to confirm every single transaction. This roll-up technique helps increase the speed of data validation on the blockchain.
The mentioned rollup is carried out on the Abitrum blockchain. Abitrum then gathers the transaction data batch and settles it on the rollup blockchain. Subsequently, these processed data batches are relayed to the ETH blockchain.
Merits of Abitrum
- Abitrum is compatible with the EVM (Ethereum Virtual Machine): The Ethereum blockchain uses the EVM for executing smart contracts.
- Abitrum has a faster transaction processing speed and low transaction charges.
The roll-up technology on the Abitrum Nitro is faster when processing transactions. Other advantages include lower charges, being more user-friendly, and being more compatible with the EVM. The Abitrum Nitro is 7 to 10 times faster than the Abitrum Classic (an older version of Abitrum).
- It also possesses much stronger security.
Abitrum uses ETH coins to run its system since it doesn’t have its own token. Consequently, it is the Ethereum secured by the network’s layer.
Demerits of Abitrum
- Challenge Period
The optimistic rollup architecture of Abitrum includes a challenging period. The challenge period is used when transactions are detected incorrectly. This was set up so as to provide users with the time to confirm that all their blocks are correct transactions. Users who wish to withdraw their money from Abitrum will have to wait for the challenge period of 7 days to elapse.
- Validators Are Centralised
As of now, Abitrum Validator is working towards becoming totally non-centralized, as the platform still uses permission validators. However, Abitrum announced its intentions of growing its pool of validators, which will be done by inviting more companies to collaborate with its network.
- Users can Lose Their Money
Users can experience a loss of their money if the validators check the published status. Also, money can be lost when there is an error in Abitrum Nitro’s one-stop implementation.
Abitrum Major Performance
Abitrum is the fifth-biggest Layer 1 or Layer 2 project, as it possesses a TVL of $1.4 billion USD. It also has a 3% TVL over all blockchains. Furthermore, Abitrum’s market share has grown considerably from its 1% value one year ago.
Generally, despite the risk posed by its being somewhat centralized, this project has a very solid foundation, and it is anticipated that it will continue to develop this year.
