The Arbitrum network is slated to undergo a big upgrade shortly. The transition to Nitro will solve a few key issues and introduce more innovative features. It is a prominent development for the popular network, although it may not necessarily yield a price increase.
Arbitrum Nitro Is On The Horizon
Innovation occurs around the clock in the blockchain world. New developments can help improve existing networks and enhance their appeal. While most people focus on Ethereum and The Merge, networks like Arbitrum will try to improve their market position too. The Nitro release for this network will not only improve network capacity and transaction costs without interrupting the user experience.
Contrary to what some people may expect, the “migration” to Arbitrum Nitro should not result in downtime or a chain split. Instead, everything should occur organically, although network participants will immediately benefit from reduced fees and higher transaction throughput after the switch. That also means the network will become a lot faster, which is excellent news for Dapps built on this blockchain.
One of the key benefits of Nitro is how developers can write and compile the L2 Arbitrum engine through standard languages and tools. It is no longer required to rely on custom-designed coding and the associated compiler. Moreover, Geth’s core is compiled into Arbitrum, marking a crucial network milestone.
Furthermore, the ArbOS component is slimmed down and rewritten in Go. That enables cross-chain communication and better batching and compression to minimize costs from L1 transactions. Even though Arbitrum is a fair bit cheaper to use than Ethereum, it never hurts to introduce even cheaper options wherever possible.
A Potential Boost For DeFi
One of the main reasons people flock to Arbitrum is to reduce costs on DeFi activities. Despite the bearish market conditions, the L2 network is one of the few solutions noting DeFi TVL growth this month. A significant gain of over 18% in 30 days brings Arbitrum’s Total Value Locked to over $919 million. Surpassing $1 billion again is the next objective, although the bearish pressure will make that pretty tricky.
What is interesting is how the L2 solution is home to over 100 DeFi protocols. That includes popular Ethereum-based projects like Curve, Uniwap, and Aave V3, but also solutions like GMX, Stargate, Radiant, and Synapse. It is a good collection of protocols covering derivatives, lending, DEXes, yield farming, options trading, and CDPs.
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