Developers at the Arbitrum network are set to implement a significant upgrade starting on March 18th, reducing the cost of Layer-2 transactions by 10x, with substantial reductions in gas fees.

The Offchain Labs team has rolled out updates to ArbOS (also known as Atlas). This upgrade will introduce support for binary large objects (blobs) transactions, aimed at lowering the cost of transmitting data from Layer 2 to the Ethereum mainnet.

Arbitrum’s community has shown support for the Atlas update, with representatives from Offchain Labs expecting the average base fee to decrease from 0.1 Gwei to 0.01 Gwei, meaning operations previously costing $0.5 will now cost around $0.05.

Other Layer-2 networks such as Optimism and Base have seen significant improvements in gas efficiency after the Dencun upgrade. Gas fees for the Base protocol immediately dropped from $0.31 to $0.0005.

According to data from L2Fees, transaction costs on Optimism have dropped to less than $0.01.

Arbitrum network fees were updated on March 13th alongside the activation of Dencun on the Ethereum mainnet. As a crucial part of the upgrade, EIP-4844 aims to expand the network by introducing new transaction types for blobs. This update will reduce the cost of Layer-2 operations by tenfold and significantly improve Ethereum’s throughput.

Understanding ArbOS

ArbOS Atlas is the first version of a series of updates named after planets’ satellites, with all versions starting with the letter “A,” symbolizing developers’ commitment to exploring the ecosystem’s limitless potential.

Arbitrum is supported by nodes running Nitro. ArbOS is part of Nitro, providing L2-specific logic including generating and executing L2 blocks, managing L1 accounting costs, and supporting critical bridging functionalities.

Introducing Dencun to Arbitrum

ArbOS Atlas prepares the Arbitrum chain to support the Ethereum Dencun upgrade, benefiting both developers and users. The most significant impact for most will be the substantial change in Ethereum L2 transaction costs.

ArbOS Atlas provides the ability for Arbitrum chain to publish user transactions to Ethereum in a new Ethereum transaction format known as Blob, thereby reducing the costs of these transactions (EIP-4844), offering cheaper new storage opcodes for temporary data (EIP-1153), and cheaper memory copying (EIP-5656).

ArbOS Atlas also adds support for EIP-6780, aligning Arbitrum with EVM’s security posture and laying the groundwork for future EVM improvements.

Applications on Arbitrum do not need to be modified or take any explicit action to opt in (the entire chain will automatically opt into ArbOS 20 “Atlas”).

ArbOS Atlas has passed through the audit, voting, and approval process conducted by the Arbitrum DAO on-chain.

Due to Arbitrum’s high customizability and ability to be deployed in various configurations, Dencun will have different impacts:

• All L3 Rollup chains on Arbitrum One will see lower fees without any additional action required.

• L3 chains on Arbitrum One will see unchanged fees if using alternative data availability (DA) solutions such as Arbitrum AnyTrust, Avail, Celestia, EigenDA, or NEAR DA.

• Self-managed Orbit L2 Rollup chains must deploy ArbOS Atlas and enable Blob publishing to see lower fees. No fee changes will occur if the L2 Rollup chain is inactive.

• Orbit L2 chains using alternative DAs will also see unchanged fees.

Additionally, as part of the ArbOS Atlas rollout, security fixes have been applied to the Sequencer Inbox contract, addressing an arithmetic overflow vulnerability that allowed the Sequencer to disable the inclusion mechanism forcibly.

Lowering Arbitrum Gas Costs

On Layer 2 and Layer 3 chains, fees consist of two parts: execution gas fees, reflecting the cost of using resources on L2/L3 chains, and data publishing gas fees, reflecting the cost of publishing data.

With the introduction of EIP-4844 on Ethereum, it is expected that L1 data publishing fees will decrease significantly. However, predicting the exact size of this reduction at this time poses a challenge.

In addition to lowering data publishing fees through EIP-4844, ArbOS Atlas will also make significant reductions in other fees, expected to be enabled by March 18, 2024:

• L1 residual fees. Reduced from 32 gwei to 0 per compressed byte.

• L2 base fees. Minimum fee reduced from 0.1 gwei to 0.01 gwei.

Please note, this is in addition to the decrease in L1 data publishing fees coming with EIP-4844. The combination of EIP-4844 with the forthcoming reduction in Arbitrum execution fees is expected to significantly lower transaction costs, benefiting all users.

More Savings with Stylus Overlay

Arbitrum Nitro powers the technology stack for Arbitrum One, Arbitrum Nova, and Arbitrum Orbit chains, with Stylus being an upgrade to Arbitrum Nitro.

Following DAO approval, Arbitrum Stylus is expected to further evolve in 2024. With lower transaction costs brought by EIP-4844 and other ArbOS Atlas fee changes, combined with potential 10x computational efficiency and 100x memory cost improvements with Stylus, there will be greater savings compared to traditional Ethereum L2.

By combining with Stylus and EVM+, applications and use cases previously thought impractical on Arbitrum can now be realized, especially those generating high transaction volumes, such as games, social finance, and exchanges.

Reference: Arbitrum, crypto.news

Translation: MBlock

Disclaimer: This article does not constitute any investment advice. Investors should be aware of the investment risks.

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