Transaction activity at Arbitrum has grown by 550% since August: Delphi Digital

Since the Nitro update, activity on Arbitrum has increased rapidly and accounts for almost two-thirds of the transactions observed at the base level of Ethereum.

The Ethereum Arbitrum layer 2 scaling solution saw a significant surge in activity after the Nitro update in August, capturing approximately 62% more transactions than the Ethereum base layer.

In a November 1 report, crypto research firm Delphi Digital noted that as of the weekend of October 24, the total number of Arbitrum transactions had increased by 550% since August, citing data from Dune Analytics.

In a previous post on its Twitter page, Delphi Digital initially stated that Arbitrum accounts for 62% of all transactions in ETH, which was later explained by "incorrect wording".

Arbitrum, developed by New York-based cryptocurrency and blockchain firm Offchain Labs, aims to scale Ethereum smart contracts by using Optimistic Rollup technology to pool large batches of transactions outside the Ethereum smart contract network into Ethereum.

Most of the well-known protocols use Arbitrum, such as SushiSwap, Uniswap, GMX decentralized exchanges, Aave lending protocol, and Stargate liquidity transport protocol. As of this writing, the current Total Locked-Up (TVL) is $2.59 billion, according to L2Beat.

The company's analysts noted that Arbitrum's weekly active users have surged by 125% since October 10 and hit a new high of 282,000 in the penultimate week of October.

Analysts also speculate that much of the surge in activity is being driven by speculators trying to increase their activity on the network in hopes of getting a bigger airdrop than the blockchain’s native token, as hinted by Offchain Labs co-founder Steven Goldfeder.

On August 31st, Arbitrum One's mainnet was upgraded to Nitro, which Offchain Labs claimed in an April 7th post, will result in lower transaction costs while increasing network bandwidth.

"While Arbitrum is already 90-95% cheaper than Ethereum on average today, Nitro is cutting our costs even more."

Low fees have led various players from the crypto ecosystem to want to integrate with Arbitrum One, and on Nov. 1, decentralized finance (DeFi) optimization tool Furocombo, capital raising protocol Aelin, and insurance protocol Y2K Finance announced that they are powered by the popular scaling solution.

On October 13, Offchain Labs announced the acquisition of one of the main development teams of Prysmatic Labs, which is developing the architecture of The Merge update for the Ethereum blockchain. The company hopes to provide greater communication and collaboration between developments at both levels.