Arbitrum – an Ethereum layer-2 scaling solution – is poised to undergo a major network upgrade on Wednesday.

The upgrade will help Ethereum address the onerous transaction fees that have plagued the network over the past two years. 

Per a tweet from Arbitrum on Monday, the “Nitro” upgrade will go live on August 31st. It will be accompanied by at least two hours of planned network downtime, starting a 10:30 am EST.
According to Offchain Labs – the developers behind Arbitrum One – Nitro “is a fully integrated, complete layer 2 optimistic roll-up system, including fraud proofs, the sequencer, the token bridges, advanced call data compression, and more.”
Optimistic rollups are a scaling approach that processes and stores Ethereum transactions off-chain. Transactions are later “rolled up” in batches of any size, and settled on the Ethereum mainnet as call data. 
The new Arbitrum features a new prover, allowing the L2 Arbitrum engine to be written using standard tools and languages. Specifically, Geth – the most popular Ethereum client – will be compiled directly into Arbitrum. 
Furthermore, Offchain Labs updated Abitrum’s operating system by rewriting its component in Go. This will assist cross-chain communication between Arbitrum and Ethereum while minimizing the L1 costs of batching transactions. 

“Essentially, Nitro runs Geth at layer 2 on top of Ethereum, and can prove fraud over the core engine of Geth compiled to WASM,” explained Offchain Labs. 

According to data from Defi llama, Arbitrum currently has a TVL of $926 million. By that metric, it’s the 8th largest chain for DeFi.
Nitro arrives on the brink of the merge – the Ethereum mainnet upgrade that will convert its consensus mechanism to proof of stake next month. 
Though it will not directly lower fees, the merge will move Ethereum further down its roadmap towards sharding, which will exponentially increase transaction throughput.

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