# Arbitrum Introduction Arbitrum is a true layer 2 solution for Ethereum based on optimistic rollups. In exchange for some ease-of-use trade-offs, transactions on Arbitrum are much faster and cheaper. "Arbitrum is an L2 scaling solution for Ethereum...**"** $$^{1}$$ which uses optimistic rollups to reduce gas fees while offering the security guarantees of the Ethereum network. Rollup explainer: (And how this relates to $$ saved for the user.) In short, all transaction data is made available on mainnet (Ethereum) but optimistic rollups use a separate network (Arbitrum) to perform network calculations. Transaction validity is guaranteed by a crypto-economic challenge process. Network security guarantees are especially important platforms in which users lock up a significant amount of capital for a significant amount of time. While there are other networks and sidechains that are cheaper and faster, Ethereum roll-up solutions (Arbitrum, Optimism, ZKrollups, etc.) offer the highest security guarantees while minimizing transaction costs. Read more about Roll-ups here: Read more about Arbitrum here Arbitrum vs. Optimism: When creating a non-fungible piggy on the Ethereum mainnet, the gas costs were quite demanding. This is due to the amount of information needed to correctly execute a piggy.\ Layer 1 gas costs were running around: ## | Layer 1 action | gas consumed | gas price | fee (ETH) | ETHUSD | fee (USD) | | :------------: | ------------ | --------- | --------- | ------ | --------- | | create | 319408 | 10 gwei | 0.0031941 | $200 | $ 0.64 | | auction | 182889 | 10 gwei | 0.0018289 | $200 | $ 0.37 | | oracle | 211342 | 10 gwei | 0.0021134 | $200 | $ 0.42 | Previously the gas costs and transaction fees were tenable. A lot of gas was consumed when interacting with the SmartPiggies contracts, but the gas costs (\~10 gwei) and Ethereum US Dollar cross rate (\~$200) were low. When everything goes up, so does the transaction fees. When we look at current prices $$^{2}$$ the story changes: | Layer 1 action | gas consumed | gas price | fee (ETH) | ETHUSD | fee (USD) | | -------------- | ------------ | --------- | --------- | ------ | --------- | | create | 319408 | 100 gwei | 0.0319408 | $2000 | $63.88 | | auction | 182889 | 100 gwei | 0.0182889 | $2000 | $36.58 | | oracle | 211342 | 100 gwei | 0.0211342 | $2000 | $42.26 | The fees in the current market have increased by a factor of 100. If gas cost fluctuation is taken into account, when there is a market event and the gas price goes above 200 gwei, settling a piggy goes from $42 to $88 right when one may want to take that piggy action. This does not make for a great user experience. If we look at the reductions from using Arbitrum, we get the following picture: | Layer 2 action | gas consumed | gas price | fee (ETH) | ETHUSD | fee (USD) | | -------------- | ------------ | --------- | --------- | ------ | --------- | | create | 6752 | 100 gwei | 0.0006752 | $2000 | $1.35 | | auction | 5728 | 100 gwei | 0.0005728 | $2000 | $1.16 | | oracle | 2656 | 100 gwei | 0.0002656 | $2000 | $0.53 | Using Arbitrum as a scaling solution, SmartPiggies can be created, auctioned, and settled for under $5. This is more in line with the SmartPiggies mission or bringing access and opportunity, where before there was little to none.
There are other advantages to using a layer 2 solution, for example escaping the code size limitations inherent to the Ethereum mainnet, and yet more advantages to using Arbitrum. For more information, please visit the Arbitrum [docs](https://developer.offchainlabs.com/docs/inside_arbitrum). ## Footnotes 1 2 At current prices as of 2021