Arbitrum Network Sets New Daily Transaction Record
The Ethereum layer-2 network Arbitrum achieved a new milestone over the weekend, recording its highest-ever number of daily transactions. The surge in activity was driven by the excitement surrounding inscriptions, which even caused a temporary network outage on Friday. According to data from IntoTheBlock, the network processed 5.4 million transactions on Saturday, surpassing the previous record of 2.5 million in April.
Arbitrum’s Optimistic Rollups Enable Faster and Cheaper Transactions
Arbitrum utilizes optimistic rollups to enable faster and more cost-effective Ethereum transactions. By batching transactions together and settling them simultaneously on the main network, Arbitrum can handle around 40,000 transactions per second (tps), compared to Ethereum’s capacity of approximately 30 tps.
Inscriptions Drive Transaction Volume and Network Fees
Arbitrum is among the platforms that have adopted inscriptions this year. Inscription-based tokens offer increased flexibility and ease of movement, leading to higher transaction volumes and network fees. Bitcoin has experienced a surge in average daily fees over the past seven days, surpassing Ethereum with fees totaling $13.9 million.
Network Outage Caused by Inscriptions Frenzy
The recent frenzy around inscriptions led to a partial network outage on Arbitrum when the platform’s sequencer stalled. Prior to the incident, over 90% of transactions processed by Arbitrum were inscriptions-based. Other networks, such as Avalanche and the Telegram Open Network (TON), have also faced challenges due to increased transaction overflow caused by inscriptions.
Addressing High Fees Through Various Approaches
To combat rising network fees, Bitcoiners are exploring different strategies. Some, like Bitcoin Core developer Luke Dashjr, have chosen to censor inscriptions entirely. Others are focusing on layer 2 solutions and reviving old Bitcoin sidechains like Liquid to facilitate faster and cheaper BTC transfers. The surge in fees has significantly boosted revenue for Bitcoin mining pools, with over one-third of their earnings now coming from BTC transactions alone.
Hot Take: Inscriptions Fueling Network Activity and Challenges
The implementation of inscriptions has generated a frenzy of activity across various blockchain networks, including Arbitrum. While this surge in transactions brings benefits such as increased flexibility and transaction volume, it also poses challenges such as network outages. As the crypto industry continues to explore solutions for high fees and scalability, the impact of inscriptions on network activity will remain a topic of interest.
By
By
By
By