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Arbitrum is a Layer-2 scaling solution for Ethereum, designed to enhance its scalability and reduce transaction fees. It operates as an Ethereum sidechain, offering developers and users a way to conduct faster and more cost-effective transactions while retaining compatibility with the Ethereum network. Arbitrum uses an Optimistic Rollup approach, which enables off-chain computation while maintaining security through Ethereum's mainnet. It has gained recognition for its role in addressing Ethereum's scalability challenges, making it easier for developers to create decentralized applications (DApps) and users to interact with the Ethereum ecosystem in a more efficient manner within the Web3 landscape.