The Nitro update will ameliorate the transaction fee crisis that has plagued the growth of the Ethereum network for the past two years.
Ethereum’s Layer 2 scalability solution, Arbitrum, is making one of its most significant updates on Wednesday, aimed at increasing transaction efficiency, reducing transaction fees and facilitating on-chain communication between Arbitrum and Ethereum.
Calling the update ‘Nitro’, Orbitrum confirmed the date of the upgrade in a Twitter post on Aug. 29, confirming that the upgrade will take effect on Aug. 31 at 10:30 AM Eastern Time, while noting that two to four hours of network downtime is to be expected.
Abritrum is an Ethereum layer-2 scaling solution that utilizes Optimistic Rollup technology to bundle large batches of transactions off-chain from Ethereum smart contracts and decentralized applications before submitting them to Ethereum.
According to Offchain Labs’ Github account, Nitro will denote a “fully integrated, complete layer 2 optimistic rollup system” that builds on Arbitrum One with newly improved fraud proofs, along with updated sequencers, token bridges and calldata compression mechanisms.
Offchain Labs is a blockchain-based company founded in 2018 which builds a suite of Ethereum scaling solutions, with the Arbitrum One network being the most notable network arranged by the firm.
Offchain Labs has also updated its ArbOS (Arbitrum Operating System) component, which is now rewritten in the Go software programming language. The new version improves cross-chain communication between Arbitrum and Ethereum, and transaction batching and data compression, which will in turn minimize costs on the Ethereum mainnet.
The document also states that the state of Arbitrum One “will be migrated seamlessly” onto Nitro, which should, if executed correctly, eliminate the possibility of a chain split.
In an Apr. 2022 article, Offchain Labs said the Arbitrum Nitro upgrade would be “the most advanced Ethereum scaling stack” and that “Nitro will massively increase network capacity and reduce transaction costs,” stating:
“Today, we throttle Arbitrum’s capacity, but with Nitro we’ll be able to release those controls and significantly up our throughput. And while Arbitrum today is already 90–95% cheaper than Ethereum on average, Nitro cuts our costs even further.”
According to decentralized finance (DeFi) aggregator DeFi Llama, Arbitrum has $936 million total value locked (TVL) on the network spread across 111 different protocols, with GMX, Stargate, Curve, and Uniswap among the most common applications.
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