Arbitrum is a Layer 2 (L2) blockchain protocol built on top of the Ethereum blockchain that allows Ethereum transactions to be processed more efficiently. 

By increasing the amount of transactions Ethereum can process, as well as the speed with which it can process them, Arbitrum has the additional benefit of reducing transaction costs, known as gas fees, associated with using Ethereum and its various decentralized applications.

Arbitrum also allows developers to create and execute their own Ethereum-compatible smart contracts. These can be programmed to run decentralized applications that can interact with the broader Ethereum ecosystem without bogging down the main blockchain’s performance.