Close gnome-software for now and try updating from the terminal with $ sudo dnf update
I thought it was rpm-ostree not dnf
You could do ‘rpm-ostree’ but looking at the screenshot it seems the issue is the dnf(package manager) plugin for gnome-software.
sudo: dnf: command not found
It looks like this is an existing issue that has happened before with Fedora 30. Here’s the thread to follow below.
On Fedora Silverblue 31, you can also use below command to update your system.
dnf command is not available in Fedora Silverblue 31 as its based on ostree only.