Discover how transaction volumes affect blockchain and cryptocurrency, specifically the Arbitrum blockchain.
Transaction volumes are a key indicator of network activity in the world of blockchain and cryptocurrencies, and the Arbitrum blockchain is no exception. The current ARB airdrop on March 23 coincided with a recent rise in transaction volumes on the Arbitrum network.
Among the most major in the crypto world, Arbitrum records a high degree of activity
Arbitrum, a layer 2 scaling solution for Ethereum, seeks to increase transaction volume and cut costs. Offchain Labs’ protocol offers a fast, cheap Ethereum foundational layer alternative.
Over the past 20 days, the Arbitrum blockchain has seen record transaction volumes. On March 23, ARB’s airdrop day, the network processed 2.72 million transactions in 24 hours, a record.
Since then, the amount of network activity has remained continuously high, averaging between 1.5 and 2 million transactions each day. This level of activity demonstrates how well-liked the Arbitrum network is and how much demand there is for its services.
The Arbitrum community celebrated the March 23 airdrop of ARB, the protocol’s native token, to qualified users. The airdrop, which was meant to get users involved, appears to have worked based on the transaction volume rise.
The Arbitrum network’s growth indicates Ethereum’s shift toward layer 2 scaling solutions. Due to the popularity of non-fungible tokens (NFTs) and decentralized finance (DeFi), Ethereum’s foundation layer has become crowded, increasing transaction fees and processing delays.
Some characteristics of the cryptography used by Arbitrum
Layer 2 scaling solutions like Arbitrum handle transactions off the chain and settle them on the chain to reduce transaction times and costs. As more users and developers adopt layer 2 solutions like Arbitrum, transaction volumes and network activity will climb.
Additionally, the recent increase in activity on the Arbitrum network is encouraging for the overall blockchain business. With scalability concerns plaguing Ethereum and other blockchain networks, layer 2 solutions like ARB present a workable option, enabling the sector to develop and expand.
The current increase of activity on the ARB network is not without its difficulties, of course. The network’s architecture and capacity will be tested as transaction volume rises. To now, it seems as though the Offchain Labs team’s efforts to ensure that the network can support the rising demand have been effective.
The Arbitrum Foundation pledges to solicit fresh votes from the general public
The non-profit Arbitrum Foundation split its governance package into several votes after community opposition. The Arbitrum Foundation created the Ethereum Layer 2 scaling solution.
ARB token owners fiercely protested the package, which contained various governance reforms. The fundamental issue was that there was just one vote on the bundle, not on individual recommendations.
Arbitrum Foundation initially advocated submitting the package as a single vote to ensure concurrent updates and network performance. The Foundation changed its mind after ARB token holders campaigned for individual voting.
On Sunday, the Foundation said it carefully addressed the community’s concerns before dividing the governance concepts into multiple votes so token holders could vote on each proposal independently.
According to the statement, the Foundation works closely with the community to ensure that network governance considers all stakeholders’ preferences and interests.
ARB token owners, who had criticized the first package for missing transparency and denied them a voice on specific ideas, liked the update. Some threatened to sell their tokens and leave the network if the original package was implemented.
DeFi: user-controlled systems are required
As more DeFi programs seek community involvement on network growth, the dispute shows governance’s growing relevance.
Decentralized governance has been criticized as onerous and ineffective, but others believe it’s essential to DeFi’s user-run financial system.
As the DeFi sector matures, governance will continue to plague projects and their communities. Other efforts can learn from the Arbitrum Foundation’s decision to listen to its community and offer them more network governance control.