Arbitrum, a top cryptocurrency network with a market cap of over US$1.4 billion (AU$2.4 billion), came to a halt early today because it essentially ran out of funds for ‘gas.’ Yikes!
The network was unable to process cryptocurrency transactions for over an hour because its ‘sequencer’, a central software that facilitates transactions, did not have enough money, or in this case, ‘gas fees.’
As a result, over US$2.24 billion (AU$3.36 billion) in crypto deposits were… sitting on the blockchain in silence.
What are ‘gas fees’ in crypto?
Gas, in the crypto world, refers to “the unit that measures the amount of computational effort required to execute specific operations” on, in this case, the Arbitrum network.
Any user who wants to make a crypto transaction, such as paying someone in crypto or buying an NFT, has to pay a ‘gas fee’ to push the transaction forward. One could think of it as the crypto world’s equivalent of transaction fees when making payments online.
Arbitrum wants to make Ethereum better, but…
The Arbitrum network, at its core, aims to offer a blockchain network that is a ‘step up’ from what Ethereum currently has in terms of infrastructure. It offers faster, more scalable solutions, and more privacy to users.
Arbitrum uses Ether (ETH) to pay for gas fees on its network, and it typically owns a chonky stock of ETH to do so. It is important to note here that unlike a traditional banking platform where transaction fees are usually fixed, gas fees fluctuate wildly. This is due to a number of factors, a main one being that there may be a lot of people trying to process transactions at once at a certain time of the day.
But in this case, the blockchain network simply… ran out of ETH stock. Nobody knows for sure why. But the ‘halt’ was long enough to make the crypto bros panic.
According to DLNews, the Arbitrum team also confirmed on Discord that they were unable to connect with the network’s sequencer.
So, what did Arbitrum do? The network had to be “manually replenished with Ether”, according to DLNews. We are picturing an intern scrambling into Arbitrum’s headquarters with a huge sand bag, frantically pouring Ethereum coins into a processor.
At the time of writing, the Arbitrum now appears to have resumed its regular operations. Phew.