Arbitrum pauses Odyssey after gas fees spike

Quick Take

The Arbitrum Layer 2 solution became more expensive to use than usual.
The higher-than-expected fees resulted from temporary congestion on Arbitrum.

Fees on Ethereum's Layer 2 scaling solution Arbitrum One rose to unusual levels for several hours on Wednesday.

The average transaction fees to perform a token swap on Arbitrum spiked to nearly $5, per on-chain data, many times more than normal. The higher-than-expected fees on Arbitrum were caused by increased user activity.

The heightened activity has, in part, resulted from an incentivized campaign called Arbitrum Odyssey, a 2-month promotional campaign. In this, Offchain Labs, Arbitrum's development firm, promised NFT rewards to users who interact with various Arbitrum-based DeFi protocols. Airdrop farmers — those who try to be qualified for future airdrops — are speculating that these NFTs will later give access to a token airdrop, but this is by no means guaranteed.

The Arbitrum team has now paused Odyssey to manage increased congestion and bring down the gas fees. In a Twitter post, the team said that Odyssey will remain halted until Arbitrum deploys Nitro, a new update that will increase its computational capacity. The fees on Arbitrum have since come back down and are now sitting at around the $2 mark at the time of this article.

Per its official blockchain explorer called Arbiscan, the Layer 2 network experienced a 45% increase in daily transactions in the last few weeks. The network also touched a record high of more than 287,000 transactions on Monday.

Arbitrum is a Layer 2 solution that leverages a technology called Optimistic Rollups. This results in an off-chain computation network that lets it achieve faster and cheaper transactions while still deriving security from the main Ethereum blockchain.

With over $2 billion in total value locked, Arbitrum leads the Layer 2 market ahead of others like Optimism, Boba and Metis, that all rely on the same scaling technology.

Correction: A previous version of this article stated that token swap fees on Arbitrum were higher than the Ethereum mainnet. In reality, there was a bug in the CryptoStats fee adapter that reported incorrect data. The swap fees on Arbitrum never actually rose higher than Ethereum, according to David Mihal, a software engineer at CryptoStats.