Arbitrum vs Stellar

Table of Contents

1. Metrics
2. Detailed Comparison
   • Architecture and Purpose
   • Performance Metrics
   • Transaction Costs
   • Technical Infrastructure
   • Consensus and Security
   • Tokenomics and Supply
   • Development and Community
   • Use Case Optimization
   • Integration and Accessibility
3. FAQs
   • Is Arbitrum faster than Stellar?
   • Is Arbitrum cheaper than Stellar?

Metrics

Detailed Comparison

Architecture and Purpose

Arbitrum and Stellar represent two distinct approaches to blockchain technology. Arbitrum operates as a Layer 2 scaling solution built on top of Ethereum, focusing on improving transaction throughput and reducing costs for the Ethereum ecosystem. In contrast, Stellar functions as a Layer 1 blockchain specifically designed for cross-asset transfers and financial inclusion.

The fundamental difference in their architecture influences their use cases:

• Arbitrum primarily serves as a scaling solution for Ethereum-based applications
• Stellar operates as an independent network optimized for financial transactions and asset transfers

Performance Metrics

Transaction Speed and Block Time

Both chains offer impressive performance metrics, but with different strengths:

• Arbitrum
  • TPS: 4,000 transactions per second
  • Block Time: 13 seconds
• Stellar
  • TPS: 200 transactions per second
  • Block Time: 5 seconds

While Arbitrum boasts a significantly higher TPS, Stellar compensates with faster block times. This means that while Arbitrum can handle more transactions in bulk, Stellar offers quicker transaction finality for individual transfers. This makes Stellar particularly effective for real-time payment scenarios, while Arbitrum excels in handling high-volume DApp interactions.

Transaction Costs

The cost difference between these networks is substantial:

• Arbitrum: Average fee of 0.101 ETH
• Stellar: Average fee of 0.0000000085 XLM

Stellar's remarkably low transaction fees make it extremely accessible for micropayments and financial inclusion initiatives. Arbitrum, while more expensive than Stellar, still offers significant cost savings compared to Ethereum's base layer, making it an attractive option for DApp users seeking lower fees while maintaining Ethereum compatibility.

Technical Infrastructure

Smart Contract Capabilities

Both blockchains support smart contracts, but their implementations differ significantly:

• Arbitrum
  • EVM-compatible
  • Supports full Ethereum smart contract functionality
  • Familiar development environment for Ethereum developers
• Stellar
  • Non-EVM based
  • Custom smart contract implementation
  • Focus on financial operations and asset issuance

Arbitrum's EVM compatibility gives it a significant advantage in terms of developer adoption and ecosystem compatibility, while Stellar's specialized approach caters specifically to financial use cases.

Consensus and Security

Both networks utilize Proof of Stake (PoS) consensus, but with different implementations:

• Arbitrum
  • Uses KECCAK-256 hashing
  • Inherits security from Ethereum's PoS system
• Stellar
  • Uses Stellar Consensus Protocol (SCP)
  • Includes built-in staking rewards (1%)

Stellar's consensus mechanism is specifically designed for fast finality in financial transactions, while Arbitrum's security model builds upon Ethereum's robust PoS infrastructure.

Tokenomics and Supply

Both chains have interesting approaches to token supply:

• Neither has a maximum supply cap
• Arbitrum uses ETH as its native token
• Stellar uses XLM with built-in staking rewards

The lack of a supply cap in both systems allows for long-term sustainability, but their token utilities differ significantly. ETH on Arbitrum is used primarily for gas fees and DApp interactions, while XLM serves as a bridge currency for cross-asset transfers.

Development and Community

The networks show different approaches to community engagement and development:

Arbitrum:

• Created by Germans Gedgauds
• Strong focus on developer tools and documentation
• Active GitHub presence through OffchainLabs

Stellar:

• Founded by Jed McCaleb (notable for co-founding Ripple)
• Comprehensive ecosystem of financial partners
• Extensive documentation and development resources

Both platforms maintain active social media presence and development communities, but Stellar's longer history has resulted in more established partnerships in the traditional financial sector.

Use Case Optimization

The networks are optimized for different primary use cases:

Arbitrum excels in:

• DApp deployment and operation
• High-volume transaction processing
• Ethereum ecosystem integration
• Complex smart contract execution

Stellar excels in:

• Cross-border payments
• Asset tokenization
• Financial inclusion initiatives
• Real-time settlement

Integration and Accessibility

The platforms offer different levels of integration with existing systems:

• Arbitrum provides seamless integration with the Ethereum ecosystem, making it attractive for existing Ethereum developers and users
• Stellar offers robust APIs and tools for financial institutions, making it easier to integrate with traditional banking systems

Both networks maintain comprehensive documentation and development resources, but their target audiences differ significantly based on their core functionalities.

FAQs