What is a Arbitrum?
Quick Definition
Arbitrum is a Layer 2 blockchain network built on top of Ethereum, designed to offer faster and cheaper transactions while inheriting Ethereum's security and infrastructure.
Full Definition
Arbitrum is one of the leading Layer 2 scaling solutions for Ethereum. It works by processing transactions off the Ethereum mainnet and periodically settling the results back to Ethereum, a model called "optimistic rollup." This approach delivers two big benefits: transactions are significantly faster and less expensive than on Ethereum mainnet while still inheriting the security of the underlying Ethereum network.
Arbitrum has become one of the most widely adopted Layer 2 networks, with extensive support from wallets, exchanges, DeFi protocols, and institutional infrastructure providers. It's a natural choice for tokens and applications that require Ethereum-level security but more cost-efficient transactions.
Why Layer 2s matter
As blockchain adoption has grown, the limitations of Layer 1 networks (mainly transaction speed and cost) have become more visible. Layer 2 networks address this without abandoning the security and decentralization of the underlying Layer 1. For stablecoins specifically, Layer 2 access is increasingly important: it makes everyday transactions more practical and enables use cases that would be less efficient on Layer 1 networks.
Steady on Arbitrum
STDY is available on Arbitrum, giving holders access to fast and cost-efficient transactions while still operating within the Ethereum security model. The choice of Arbitrum reflects our priorities: institutional-grade security and reliability, broad compatibility with existing infrastructure, and a strong fit for the use cases our holders care about.
Related Terms
Blockchain Network
ReadA blockchain network is the system of connected participants and infrastructure that validates, records, and maintains data on a specific blockchain.
Ethereum
ReadEthereum is the most widely used public blockchain for smart contracts, tokens, and decentralized applications.
Gas Fees
ReadGas fees are the transaction costs paid to a blockchain network to execute transactions and run smart contracts.
Layer 1 / Layer 2
ReadLayer 1 refers to a base blockchain network like Ethereum or Bitcoin; Layer 2 refers to networks built on top of a Layer 1 to improve scalability, speed, and cost efficiency.
Other Glossary Items
Learn about common and essential terms related to Steady and other stablecoin protocols.
Algorithmic Stablecoin
ReadAn algorithmic stablecoin attempts to maintain its value through automated rules that adjust token supply based on market demand, rather than holding equivalent reserve assets.
AML
ReadAML (Anti-Money Laundering) refers to the laws, regulations, and procedures designed to prevent the use of financial systems for laundering the proceeds of crime.
APY
ReadAPY, or Annual Percentage Yield, is the standardized rate of return an asset generates over a year, including the effect of compounding.
Asset Backing
ReadAsset backing refers to the real-world or on-chain assets held by the issuer to support the value of every token in circulation.
Asset Locking
ReadAsset locking refers to restricting access to funds for a defined period or condition, during which they cannot be transferred or used.
Asset Segregation
ReadAsset segregation is the practice of keeping client or backing assets separate from the issuer's operational funds, protecting them from the issuer's other obligations.
Audit
ReadAn audit is an independent examination of a protocol's code, reserves, or operations by qualified third parties to verify accuracy and compliance with stated claims.
Backing
ReadBacking refers to the assets or mechanisms that support a stablecoin's value and help it maintain its intended reference value.
Blockchain
ReadA blockchain is a distributed digital ledger that records transactions across a network of computers in a secure, transparent, and tamper-resistant way.
Bridge
ReadA bridge is a mechanism that enables the transfer of assets or data between different blockchain networks.
Clarity Act
ReadThe Clarity Act is a proposed US legislative framework intended to clarify the regulatory treatment of digital assets, defining when they should be treated as securities versus commodities.
Collateralization / Over-collateralization
ReadCollateralization refers to the ratio between the value of assets held in reserve and the value of tokens issued. Over-collateralization means holding more in reserves than the value of tokens issued.
Composability
ReadComposability refers to the ability of different protocols, contracts, and tokens on a blockchain to interact and combine with each other seamlessly.
Counterparty Exposure
ReadCounterparty exposure refers to the risk that another party, such as a bank, custodian, broker, or service provider fails to fulfill its obligations, potentially affecting the assets or funds it holds.
Custodial vs. Non-Custodial
ReadCustodial means a third party holds the private keys to your assets on your behalf. Non-custodial means you hold your own keys and control your own assets directly.
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