Exploring Arbitrum One and Arbitrum Nova: Understanding Their Distinct Features and Use Cases

• Arbitrum, a pioneer in Ethereum’s layer-2 solutions, is gaining attention for its unique scaling mechanisms via Arbitrum One and Arbitrum Nova.

• This guide compares these two distinct protocols, focusing on their unique approaches to transaction processing and their optimal use cases in the blockchain ecosystem.

• “Nova is perfect for projects with cost-sensitive, high transaction volume expectations like games that frequently mint new items or currency.” — OffChain team.

Explore the intricacies of Arbitrum One and Arbitrum Nova, comparing their functionalities, ideal user groups, and operational efficiencies in this comprehensive analysis.

Arbitrum One vs. Arbitrum Nova: In a nutshell

Let’s quickly highlight the key differences between these two scaling solutions before going into the technical nitty-gritty:

Now that we have outlined the key differences between the two, let’s take a step back and examine both chains up close.

What is Arbitrum One?

Arbitrum One is a layer-2 optimistic rollup chain that settles on Ethereum (L1). It batches many Ethereum-style transactions and submits them to Ethereum as call data.

The Arbitrum One chain assumes transactions are valid (“innocent until proven guilty”) and only relies on Ethereum to intervene if fraud is detected. All transaction data is posted on Ethereum, allowing anyone to rebuild Arbitrum’s state and catch invalid behavior.

This design gives Arbitrum One Ethereum-level security — it introduces no new trust assumptions, since any fraudulent L2 result can be proven wrong on layer-1 and undone.

➤ In practice, only a single honest validator is needed to challenge and prove any incorrect state, which guarantees the rollup’s security against malicious actors.

Under the hood

Arbitrum One is powered by the Nitro technology stack. Nitro uses a modified Ethereum client (“Geth at the core”) for execution, ensuring full Ethereum Virtual Machine (EVM) compatibility (developers can deploy Solidity/Vyper contracts with no changes).

Nitro brought improvements like advanced calldata compression, separate execution vs. proving environments, and Ethereum gas compatibility. This means Arbitrum One executes transactions off-chain while enforcing the same gas costs and rules as Ethereum, ensuring consistency.

Suppose a validator disagrees with the posted state. In that case, Arbitrum’s interactive fraud proof mechanism (a multi-round challenge game) is invoked on Ethereum to pinpoint the exact offending instruction and prove the fraud, forcing a correction.

Consensus and finality

A centralized sequencer (currently operated by Offchain Labs) orders L2 transactions and promptly gives users rapid confirmations, but these results are finalized on Ethereum after a challenge period (typically ~seven days) during which fraud proofs can be submitted.

After this dispute window, if no fraud is proven, the L2 state is confirmed and users can withdraw funds to L1. This approach leverages Ethereum’s consensus for security while using L2 only for fast execution.

Notably, Arbitrum One’s design is permissionless for validators — in principle, anyone can participate in validating and challenging (the network is moving toward decentralized validation as the technology like Arbitrum’s BoLD upgrade matures). This ensures decentralization: no special committee or permission is needed to uphold correctness.

Performance and fees

By executing transactions off-chain, Arbitrum One achieves significantly higher throughput than Ethereum L1 and much lower fees. It can process dozens of transactions per second (often cited around 8–15 TPS in practice) as opposed to Ethereum’s ~15 TPS limit.

Every Arbitrum batch is compressed, and only minimal data is posted to L1, dramatically reducing gas costs per transaction. Users pay gas in ETH on Arbitrum, but the fees are substantially smaller than on L1 – often a few cents to tens of cents for typical operations, depending on network demand.

For instance, swaps on Uniswap via Arbitrum One cost only a fraction of what they would on the mainnet.

This attractive pricing makes Arbitrum One preferable for DeFi applications. Indeed, several Ethereum DApps have deployed on Arbitrum One – e.g., Uniswap’s smart contracts are live on Arbitrum One, giving users much faster and cheaper trades than on Ethereum mainnet.

➤ In summary, Arbitrum One provides a general-purpose, high-security scaling solution for Ethereum: ideal for DeFi, exchanges, and any application where trust minimization and censorship-resistance are crucial.

What is Arbitrum Nova?

Arbitrum Nova is a layer-2 scaling solution designed for high-throughput and low-cost transactions by utilizing the AnyTrust protocol.

Unlike Arbitrum One, which posts all transaction data to Ethereum, Nova relies on a Data Availability Committee (DAC) to store data off-chain and provide Ethereum with a cryptographic certificate proving data availability.

The network assumes transactions are valid unless proven otherwise, similar to an optimistic rollup. However, instead of storing every transaction on Ethereum, it relies on a set of trusted entities to vouch for data availability. This approach dramatically reduces gas costs while still preserving Ethereum’s security in worst-case scenarios.

If the DAC fails to make transaction data available, Nova falls back to rollup mode, where full transaction data is posted on Ethereum. This ensures that, even in extreme circumstances, the network remains secure.

➤ Nova is optimized for gaming, social applications, and microtransactions, where low fees and high transaction throughput matter more than full decentralization. It enables cost-sensitive applications that would otherwise be impractical on Ethereum or even standard optimistic rollups.

“Nova is perfect for projects with cost-sensitive, high transaction volume expectations like games that frequently mint new items or currency or social projects with many different levers for on-chain interaction.”

— OffChain team, at the time of Arbitrum Nova launch

Under the hood

Arbitrum Nova runs on the Nitro technology stack, the same infrastructure that powers Arbitrum One. This ensures full EVM compatibility, thus enabling developers to deploy Solidity and Vyper smart contracts without modifications.

➤ In early September 2024, both Arbitrum One and Nova became MultiVM chains with the launch of Stylus. Stylus was a significant upgrade, introducing WebAssembly (WASM) support alongside the existing EVM. This makes Arbitrum a MultiVM platform allowing developers to write smart contracts in Rust, C, and C++ (in addition to Solidity and Vyper).

Today, Arbitrum One/Nova goes from EVM to MultiVM.

Stylus is now live, introducing a WASM VM to both chains, allowing devs to write contracts in Rust, C, and C++ with full composability with the EVM.

Almost 2 years in the making and of course, on Arbitrum day. 👇

— Offchain Labs (@OffchainLabs) September 3, 2024

While Nova retains Arbitrum’s fraud-proof system and transaction compression, it differs in how it handles data availability. Instead of storing calldata on Ethereum, Nova’s DAC members store the data off-chain and collectively sign a data availability certificate (DACert), posted to Ethereum.

As long as at least two honest DAC members exist, users can retrieve transaction data. If no honest member remains, Nova switches to rollup mode, forcing all transaction data onto Ethereum. This fallback mechanism ensures Ethereum-grade security in failure scenarios while maintaining extreme efficiency under normal operation.

Consensus and finality

Nova uses a centralized sequencer to order transactions, similar to Arbitrum One. The sequencer provides near-instant confirmations and batches transactions for efficient execution.

Finality follows an optimistic assumption — transactions are considered valid immediately, remaining subject to dispute during a one-week fraud-proof window. If no fraud proof is submitted, transactions become fully finalized on Ethereum.

Since data availability is managed by the DAC, the main risk is data withholding. If the DAC fails to make transaction data available, Nova reverts to posting full transaction data on-chain to guarantee correctness. While this scenario would lead to higher fees, it ensures that Nova remains Ethereum-secure even if the DAC ceases to function.

Performance and fees

Nova eliminates Ethereum’s data bottleneck by keeping transaction data off-chain under normal conditions. This allows for significantly lower costs and increased scalability.

• Gas costs: Nova’s minimum gas price is 0.01 gwei, compared to Arbitrum One’s 0.1 gwei.
• Transaction fees: A transaction that costs ~$0.10 on Arbitrum One may cost ~$0.01 on Nova.
• Throughput: Without L1 data constraints, Nova can process tens of thousands of TPS, significantly surpassing Arbitrum One’s Ethereum-limited performance.

➤ In summary, Arbitrum Nova prioritizes cost and speed over absolute decentralization. It is ideal for gaming, social applications, and microtransactions, where high throughput and negligible fees matter most. For applications requiring maximum security and decentralization, Arbitrum One remains the better choice.

Which works for what user group?

Both models have distinct strengths and limitations. Naturally, each serves different use cases based on security, cost, and scalability needs. Here’s a quick breakdown of which is better suited for the following user groups:

For developers

For developers, the decision squarely depends on application priorities.

Arbitrum One fits financial DApps, DeFi protocols, and NFT marketplaces handling high-value assets, thanks to Ethereum-grade security without additional trust assumptions.

Nova better serves games, social platforms, or high-volume apps needing ultra-low fees and high throughput.

Developers may even use both — One for valuable assets, Nova for frequent, low-value interactions.

For enterprises

Enterprises face similar considerations. Those focused on financial services, institutional use cases, or compliance-heavy applications should pick Arbitrum One for trustless security.

In contrast, consumer-facing enterprises prioritizing scale and minimal costs — like Reddit’s Community Points system — benefit from Nova’s lower fees and scalability. These users typically don’t mind embracing the DAC’s trust model as an acceptable trade-off.

For DeFi users

DeFi users should generally opt for Arbitrum One, since major liquidity pools, lending protocols, and exchanges prefer its stronger security guarantees.

Nova remains suitable for niche cases like small-value experimental trades, casual social finance apps, or microtransactions. That said, it’s less appropriate for large-value holdings.

For gaming and NFTs

Nova is usually the ideal choice here as it offers smooth, near-zero-cost transactions suitable for high-frequency interactions.

However, Arbitrum One better secures high-value NFT assets, such as unique collectibles or rare game items. Developers may thus deploy games primarily on Nova while bridging high-value assets to Arbitrum One or Ethereum.

For the best transaction cost

Users focused heavily on minimizing transaction costs, such as micropayment apps, IoT, social tipping, or frequent small-value transactions, will find Nova optimal.

On the other hand, for larger transfers or any scenario where trustless decentralization outweighs costs concerns, Arbitrum One remains the superior choice.

Arbitrum One vs. Arbitrum Nova: Which is better?

For starters, you need to evaluate the requirements of your project or activity. Consider the value of the assets involved, the acceptable level of trust, and the needed transaction throughput. Our recommendation would be to lean toward Arbitrum One for its tighter security, especially for new projects looking to establish trust. Remember, though, that Arbitrum Nova is also a powerful alternative when Ethereum-level trustlessness can be slightly relaxed in favor of ultra scalability and minimal fees.

Frequently asked questions

What is the key difference between Arbitrum One and Arbitrum Nova?

Arbitrum One is an optimistic rollup where all transaction data is posted on Ethereum, thus ensuring full Ethereum-level security. Arbitrum Nova uses the AnyTrust model, storing data off-chain with a Data Availability Committee (DAC) for lower fees and higher scalability. Nova falls back to rollup mode if the DAC fails, preserving security but reducing efficiency.

Arbitrum One vs. Arbitrum Nova: Which is better for DeFi and financial applications?

Arbitrum One is the preferred choice for DeFi because it inherits Ethereum’s security and censorship resistance without relying on additional trust assumptions. Most DeFi liquidity and major protocols like Uniswap, Aave, and Sushiswap are on Arbitrum One due to its strong security guarantees. Nova is not widely used for DeFi because it introduces a trusted DAC model, which makes it less ideal for high-value financial transactions. However, it remains suitable for niche cases like small-value experimental trades or casual social finance apps.

Arbitrum One vs. Arbitrum Nova: Which is better for gaming and social apps?

Nova offers ultra-low fees and high throughput, making it ideal for gaming, social media, and microtransactions where users cannot afford even small gas fees. The AnyTrust model allows Nova to handle millions of low-cost transactions, such as in-game actions. Unlike One, where fees scale with Ethereum’s gas costs, Nova keeps costs predictable and near-zero.

Can a project use both Arbitrum One and Nova?

Yes, developers can combine both networks by using Arbitrum One for high-value transactions and asset security while leveraging Nova for scalable, low-cost interactions. For instance, a marketplace can process payments and valuable NFT trades on One while handling frequent transactions on Nova. Bridges between the two allow assets to move between networks, optimizing cost and security.