Ethereum Rollup Arbitrum to Release Major Update

Offchain Labs, the company behind Ethereum ETH$2,984.38 scaling solution Arbitrum, announced this week the testnet launch of Nitro – a test environment for a pending major update to the optimistic rollup’s technical stack.

• According to Offchain, the update to Arbitrum will cheapen fees, speed up transactions, and make it easier for native Ethereum apps to interface with the Layer 2 chain.
• Offchain founder Steven Goldfeder told CoinDesk that Arbitrum’s fees, which were usually around 50 cents to $1 before the update, will be cut by at least 50%.
• Rollups like Arbitrum scale the Ethereum network by processing transactions and executing smart contracts – the mini-computer programs that run on blockchains – on separate rollup-specific chains.
• The data generated on Arbitrum gets bundled up and passed back down to Ethereum, where Ethereum network actors can check whether the data is valid.
• Last week, a $625 million theft from Ethereum’s Ronin sidechain showed the potential vulnerability of sidechains, which, unlike rollups, do not inherit their security from a layer 1 blockchain.
• In March, Offchain also announced Arbitrum AnyTrust chains – a cheaper, faster, more centralized alternative to its optimistic rollup.
• Arbitrum is currently Ethereum’s largest rollup solution, with nearly $2.5 billion total value locked (TVL), according to DefiiLlama.

Edit: August 30, 2022 15:24 UTC: Clarifies that the update is in testnet.