2021 marked a year of major expansion in crypto. From El Salvador adopting bitcoin as legal tender, to DAOs garnering mainstream attention, people previously unaware of decentralized finance (DeFi) and blockchain technology were soon buying their first tokens and NFTs. As more people worldwide turn to crypto networks as secure payment systems, the demand for increased transaction speed and decreased gas prices continues to rise.

The collective shift to Web3 and DeFi puts greater burden on the second most used network, Ethereum. Growing at a ground-breaking rate, a daily average of over 1 million transactions occur on the Ethereum network alone. The result? Transactions that once processed in seconds now take up to ten minutes, and with escalating traffic, transaction costs only become more expensive. It’s clear that the main—Layer 1—Ethereum chain cannot sustain this level of growth alone.

Introducing Ethereum Layer 2 Scaling Solutions


Enter Ethereum’s Layer 2 scaling solutions, designed to address current user-experience congestion issues in the Ethereum Mainnet. Built on top of the underlying Layer 1 blockchain, these new networks facilitate scalability by increasing processing speed and lowering transaction fees.

So how do Layer 2 protocols work?

  • Layer 2 transactions get executed and processed on sidechains—separate Ethereum-connected blockchains.
  • Once processed, all of the transactional data is then transferred through rollups to be stored back on Ethereum.
  • This allows for higher throughput with the same security benefits of the mainnet ledger. This high production environment allows application builders to use smart contracts at scale.

What Is Arbitrum?


With increased interest in DeFi comes increased demand for efficiency and speed in processing smart contracts on already overly-saturated networks. And out of necessity comes innovation. One of the more exciting Layer 2 solutions is Arbitrum, a major player in the search for scaling solutions. It’s designed to enhance speed and reduce cost for executing Ethereum smart contracts by using Optimistic Rollups (ORs). The Arbitrum rollup system batches and confirms transactions and smart contract calls using a different algorithm than mainnet Ethereum. These batches of transactions are then packaged in a “rollup” and cemented in place on the Ethereum main chain.

Put simply? Arbitrum runs parallel to Ethereum. It has a familiar interface, so you can interact with Ethereum tooling on a secure, decentralized network. Most importantly—you can deploy smart contracts at higher speeds and a fraction of the cost.

Using Arbitrum and Smart Contracts on Rise


At Rise, we know efficiency is key. Our Web3-enabled platform streamlines business processes, combating fraud and confusing payment systems, making it easy to work with global talent. Rise Pay allows companies to hire contractors worldwide and process transactions through smart contracts, ensuring the highest level of efficiency and security.
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Rise uses Arbitrum to establish contracts between freelancers and clients, creating unbreakable agreements that trigger instant payments upon completion according to the contract’s code and customer approval in some instances. Rather than taking hours away from projects to draft contracts and sift through paperwork, we take care of it all with security guaranteed. Leaving you to focus on your business. Get started on Rise today.