Arbitrum was down for about 7 hours on January 9th—again. The Layer 2 network protocol on the Ethereum chain suffered from a hardware failure on its sequencer node, which shut down processing of all transactions and formation of new blocks during the outage.
The network had suffered another minor outage in September 2021 that lasted for about 45 minutes. At that time, Offchain Labs (creators of Arbitrum) said that the issue was a bug that was subsequently fixed.
This time round, Offchain Labs said the network’s Sequencer experienced a hardware failure that stopped all transactions. The Sequencer is a special-purpose node that controls the ordering of transactions.
A node as important as the Sequencer should have had redundancies, which Offchain Labs said it did. However the backup nodes were undergoing software updates at the time and couldn’t take over.
In a post-mortem tweet posted after the problem had been fixed, the team behind Arbitrum said that all efforts were made to ensure that all transactions were confirmed before the Sequencer went offline. However, 284 transactions were still captured during the outage and weren’t posted to the main chain.
Network Still in Beta
Arbitrum is a Layer 2 scaling solution that processes transactions at comparatively higher speeds and at lower costs compared to the base chain. It does this by moving a lot of the computation and data storage off-chain using Optimistic rollups, then sending the transactions as call data to the Ethereum mainnet.
Arbitrum was launched in September 2021 after a $165 million AUD funding round. That means it is still undergoing development and remains in beta status, as the team tweeted:
“The Arbitrum network is still in beta, and we will keep this moniker as long as there are points of centralisation that still exist in the system.”
Despite that, it is already the biggest L2 rollup by total value of locked assets, which stands at about $3.5 billion AUD at the time of writing. It has also attracted some big DeFi protocols such as Uniswap and Balancer.
Working on Further Decentralisation
With so much at stake, Offchain Labs committed to “continue on this twofold path of minimising Sequencer downtime, and at the same time achieving the ultimate goal of full decentralisation.”
To make the system more resilient, the team said that it is working on further decentralising the network. They are doing that by creating a “twofold path of minimising Sequencer downtime,” which hopefully will minimise the chances of having a similar outage in the future.
Outage Spells More Trouble for L2 Solutions
Ethereum’s Layer 2 solutions have been under fire from L1 solutions. Despite their fair share of problems, L1 protocols such as Solana, Terra, and Avalanche offer far faster transactions and lower fees.
On the other hand, L2 solutions offer more decentralisation and more security. As one of the most important L2 solutions with a 47% market share, Arbitrum’s success will be a big boon. It has been processing about 30,000 transactions a day, but the stakes will get higher as Arbitrum grows.