Arbitrum just came to a sudden halt — it ran out of money for gas

Arbitrum stopped processing transactions for an hour today after its central piece of software that bundles transactions — the Sequencer — ran out of funds for gas.
Arbitrum has only one Sequencer and it needed to be manually replenished with Ether yesterday.
Although Arbitrum is operational again, the incident highlights the blockchain’s single point of failure.

Arbitrum, a layer 2 blockchain, stopped processing transactions for about an hour today, bringing the network with over $2.24 billion in deposits to a standstill. The reason was a bug that led to the blockchain’s centrally-controlled sequencer to run out of funds to pay for gas.

“There was a bug that occurred on the Sequencer that led to its batches reverting on-chain. When the batches revert, the Sequencer is not refunded the gas cost for sending the batch,” Patrick McCorry, a developer at the Arbitrum Foundation, told DL News.

When that happens, he said, the Sequencer runs out of ETH, “and when the bug was fixed, it was manually topped up again.”

At around 11:40 am London time developers in the Arbitrum Discord server started reporting that they could not connect to the network’s Sequencer — a piece of software which bundles up transactions and sends them to the Ethereum network for confirmation.

Layer 2 blockchains like Arbitrum need to send transactions back to Ethereum to achieve finality, meaning the transactions are inscribed on the Ethereum blockchain forever and cannot be changed.

On-chain records show that the Sequencer used up its stock of Ether, the Ethereum-native cryptocurrency used to pay transaction fees on the network. With no Ether to pay for fees, the Sequencer could not send transactions to Ethereum, bringing Arbitrum to a standstill.

Arbitrum Sequencer Transactions today (parsec)

Arbitrum currently has only one Sequencer that processes transactions. It’s run by Offchain Labs, the company which created and stewards the network.

After failing to process transactions for approximately an hour, Arbitrum now appears to be working again. A wallet which had previously sent funds to the Arbitrum multi-signature wallet sent a total of 1.4 Ether to the Sequencer at around 12:27 pm, allowing it to start sending transactions to Ethereum again.

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The Sequencer has only been manually topped up with Ether four times since Arbitrum launched in May 2021.

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Offchain Labs did not immediately respond to a request for comment.

The incident puts a spotlight on how networks like Arbitrum, which inherit Ethereum’s security and decentralisation of the Ethereum network, also rely on centralised points of control. Offchain Labs has previously said it intends to decentralise Arbitrum’s Sequencer in the future.

Arbitrum's total value locked, a metric for investor deposits in DeFi

The price of Arbitrum’s governance token, also called Arbitrum, remained largely unchanged throughout the downtime. It trades around $1.14 as of this writing.

Update, June 8: The second bulletpoint was changed from “needs to be manually replenished with Ether” to “needed to be manually replenished with Ether yesterday.” The second sentence of the first paragraph was modified to mention that there was a bug. The quotations in the second and third paragraphs were added.