Takeaway: Ethereum layer-2 network Arbitrum saw over 5.4 million transactions in one day, beating its previous record of 2.5 million. The surge was driven by rising popularity of inscriptions enabling tokens and NFTs on Bitcoin.
Previous Record Smashed
Ethereum scaling network Arbitrum set a new all-time high in daily transactions, with over 5.4 million transactions in one day. This easily beats Arbitrum’s previous record of around 2.5 million transactions in April.
Inscriptions Drive Surge
The sudden spike in transaction volumes was driven by the popularity of inscriptions, which also caused a temporary network outage on Arbitrum on Friday.
Arbitrum uses optimistic rollups to bundle transactions for faster and cheaper processing. It claims a throughput of around 40,000 transactions per second, compared to Ethereum’s 30 transactions per second.
Inscription – Based Tokens Driving Fees Higher
After adopting Ordinals inscriptions, which allows users to deploy tokens and NFTs on Bitcoin, transaction volumes and network fees on Arbitrum increased – particularly in the past few weeks. Over 90% of transactions processed prior to the outage were inscription-based.
Bitcoin saw higher daily average fees than Ethereum in the last seven days, with fees amounting to $13.9 million and standard transactions costing around $10. Twitter
Other networks like Avalanche and TON also saw slowdowns due to high inscription-based transaction volumes.
Some Bitcoin developers are attempting to reduce high fees by censoring inscriptions or focusing on Bitcoin layer 2 adoption like sidechains to enable cheaper and faster BTC transfers.
Meanwhile, Bitcoin mining pools have benefited from the fee spike, generating over one-third of their revenue from transaction fees.