Arbitrum Introduction

A product of Offchain Labs: https://offchainlabs.com/
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^{1}
which uses optimistic rollups to reduce gas fees while offering the security guarantees of the Ethereum network.
(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: https://research.paradigm.xyz/rollups
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^{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.

Footnotes

2 At current prices as of 2021https://ethgasstation.info/index.php