Dramatic Reduction in Ethereum L2 Transaction Fees Following Dencun Upgrade
Summary:
Following the recent Dencun upgrade on Ethereum's mainnet, significant reductions in transaction fees have been reported across a number of Ethereum layer 2 (L2) protocols. In some cases, protocols experienced a decrease of up to 99%, with Starknet and other platforms such as Optimism, Base, Zora OP mainnet witnessing substantial reductions in gas fees. The upgrade introduced nine different Ethereum Improvement Proposals (EIPs) that enhanced transaction speed and reduced fees. However, despite the positive initial impact, experts predict future increases in fees as competition for 'blob' space intensifies.
Following the Dencun upgrade on Ethereum's mainnet on March 13, Ethereum layer 2 (L2) protocols have experienced a substantial decrease in transaction fees, with certain protocols witnessing up to a 99% decrease. Seen as one of the most vital upgrades since The Merge, Dencun boosts the scalability of the Ethereum mainnet.
One of the standout Ethereum-based L2s, Starknet, reported a dramatic 99% decrease in gas fees following the upgrade, bringing the cost down from over $6 to just $0.04. This was reflected in a screenshot shared by the protocol.
Not only Starknet, but other L2 platforms such as Optimism, Base, Zora OP mainnet and others also saw their gas fees notably reduce post the Dencun upgrade. For instance, the average transaction fees for Optimism plummeted to $0.05, Base marked $0.064, Arbitrum recorded $0.5 while zkSync Era noted $0.16. Especially Optimism and platforms based on Optimism’s technology have witnessed substantial gas fee reductions within 24 hours of the upgrade.
One of the most utilized L2 platforms, Arbitrum One, plans to launch its ArbOS upgrade today with the aim to incorporate blob support into Arbitrum rollup chains.
Out of the nine distinct Ethereum Improvement Proposals (EIPs) introduced by the Dencun upgrade, EIP-484 incorporated data blobs and ushered in blobs as a new transaction datatype for L2s. These data blobs circumvent the conventional “call data” process to post data on the Ethereum mainnet, thereby enabling faster transactions at diminished fees. The making of Dencun took two years.
According to Tim Beiko from the Ethereum Foundation, Dencun is "the most complex fork we’ve shipped since the Merge," and equals Byzantium for having "the most total EIPs in a fork." The aim of this Ethereum upgrade was scalability and reduced gas fees. Preliminary results suggest that transaction costs for multiple L2s have indeed been reduced due to the hard fork. However, while Dencun might provide a temporary fix, it may not enough to scale the Ethereum network comprehensively. As more rollups utilize blobs and competition for blob space intensifies, fees on L2 chains using blobs could rise, leading to higher transaction costs in the future.
Published At
3/14/2024 12:38:50 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.