Here’s What You Need to Know About Arbitrum’s Major Upgrade

Arbitrum – an Ethereum layer-2 scaling solution – is poised to undergo a major network upgrade on Wednesday.

The upgrade will help Ethereum address the onerous transaction fees that have plagued the network over the past two years. 

• Per a tweet from Arbitrum on Monday, the “Nitro” upgrade will go live on August 31st. It will be accompanied by at least two hours of planned network downtime, starting a 10:30 am EST.
• According to Offchain Labs – the developers behind Arbitrum One – Nitro “is a fully integrated, complete layer 2 optimistic roll-up system, including fraud proofs, the sequencer, the token bridges, advanced call data compression, and more.”
• Optimistic rollups are a scaling approach that processes and stores Ethereum transactions off-chain. Transactions are later “rolled up” in batches of any size, and settled on the Ethereum mainnet as call data. 
• The new Arbitrum features a new prover, allowing the L2 Arbitrum engine to be written using standard tools and languages. Specifically, Geth – the most popular Ethereum client – will be compiled directly into Arbitrum. 
• Furthermore, Offchain Labs updated Abitrum’s operating system by rewriting its component in Go. This will assist cross-chain communication between Arbitrum and Ethereum while minimizing the L1 costs of batching transactions. 

• “Essentially, Nitro runs Geth at layer 2 on top of Ethereum, and can prove fraud over the core engine of Geth compiled to WASM,” explained Offchain Labs. 

• According to data from Defi llama, Arbitrum currently has a TVL of $926 million. By that metric, it’s the 8th largest chain for DeFi.
• Nitro arrives on the brink of the merge – the Ethereum mainnet upgrade that will convert its consensus mechanism to proof of stake next month. 
• Though it will not directly lower fees, the merge will move Ethereum further down its roadmap towards sharding, which will exponentially increase transaction throughput.