Dencun Upgrade Spurs Record Transaction Spike on Coinbase's Ethereum Network, Base
Summary:
After the recent Dencun upgrade, daily transactions on the Coinbase Ethereum layer-2 network Base hit a new high of 2 million on March 16. The network also experienced a spike in new users. The upgrade, which led to a reduction in Base's transaction fees by over 60%, is credited for this surge in transactions. Despite increased competition, Arbitrum and Optimism still dominate the layer-2 ecosystem. In contrast, Ethereum layer-1 gas fees have been relatively high.
On the 16th of March, the Coinbase Ethereum layer-2 network Base set a new record with daily transactions reaching 2 million. This substantial increase occurred after the recent Dencun upgrade. Prior to the improvement, Base was executing approximately 440,000 transactions every day. The day following the upgrade, this figure rose to 1.1 million and maintained an upward trajectory, exceeding 2,064,920 transactions on March 16. Concurrently, the number of new users grew drastically to 666,866, marking a 3,200% increase from the daily average in the days before Dencun.
Analysts attribute the surge in transactions, a whopping 350%, to significantly lower fees on Base since the Dencun enhancement. Blockscout reports indicate a reduction by over 60% in Base's average transaction fees post-upgrade. Coinbase launched Base in August, making it the sixth-largest network in the Ethereum layer-2 arena, boasting a total value locked at $1.46 billion. It holds a 4.1% market share in layer 2, as per the industry monitor L2beat.
The Dencun upgrade on Ethereum included EIP-4844, which lessened layer-2 transaction fees by implementing data blobs or proto-danksharding. The revision heightened L2 data availability, which subsequently cuts gas expenses by up to 90% on some networks. As per Dune Analytics, after the upgrade, famous layer-2 networks like Arbitrum, Optimism, Base, and zkSync Era have experienced a drop in average transaction fees of between 60% and 90%.
Despite boosted competition from other networks, Arbitrum and Optimism continue to rule the layer-2 landscape, with a combined total value locked of $23 billion. These networks have market shares of 42% and 23% respectively. In relation to Dencun's implementation, the cost of token swaps on the decentralized exchange Uniswap’s Optimism platform has dipped to as low as $0.01, as highlighted by the founder Hayden Adams.
In contrast, gas fees for Ethereum's layer-1 have been rising sharply, especially with the value of the asset recently surpassing $4,000. Currently, an ETH transfer costs roughly $2.1, a USDC transfer about $5, and a swap on Uniswap around $16, according to Gasfees.io.
Published At
3/18/2024 6:31:48 AM
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