Key Points
- Ethereum's Dencun upgrade has led to a significant reduction in transaction fees on Layer 2 (L2) protocols.
- Despite the success, experts warn that Dencun might be a temporary solution and may not fully scale the Ethereum network.
Layer 2 (L2) protocols on Ethereum have experienced a substantial decrease in transaction fees following the Dencun upgrade on March 13.
Dencun, a scalability-focused upgrade on the Ethereum mainnet, has been hailed as one of the most significant upgrades since the Merge.
Impact of Dencun on Various L2 Platforms
Starknet, a notable Ethereum-based L2, reported a 99% drop in gas fees post-upgrade.
The protocol's latest gas fee has plummeted to $0.04 from over $6 prior to the Dencun upgrade.
Several other L2 platforms, including Optimism, Base, Zora OP mainnet, and others, also reported a significant decrease in gas fees following the Dencun upgrade.
The average transaction fees for Optimism fell to $0.05, $0.064 on Base, $0.5 on Arbitrum and $0.16 on zkSync Era.
Within 24 hours of the upgrade, Optimism and chains based on Optimism’s tech stack, like Base, experienced the most significant gas fee reductions.
Arbitrum One, one of the most popular L2 platforms, plans to roll out its ArbOS upgrade to introduce blob support to Arbitrum rollup chains.
The Dencun hard fork introduced nine different Ethereum Improvement Proposals (EIPs), with EIP-484 introducing data blobs and providing Layer 2s with a new transaction datatype called blobs.
The latest data blobs bypass the traditional “call data” process to publish information on the Ethereum mainnet, resulting in faster transactions at lower fees.
The Dencun upgrade was in development for two years.
Ethereum Foundation’s Tim Beiko referred to Dencun as “the most complex fork we’ve shipped since the Merge,” and it ties with Byzantium for the “most total EIPs in a fork.”
Scalability and low gas fees were the primary objectives of the recent Ethereum upgrade.
Early signs indicate that the hard fork has helped several L2s reduce transaction costs.
However, experts suggest that Dencun might only be a temporary solution and may not be sufficient to scale the Ethereum network fully.
As the number of rollups using blobs increases and the competition for blob space intensifies, the low cost on L2 chains using blobs could see a rise in fees in the future, resulting in higher transaction costs.
