Ethereum’s Dencun Upgrade Delivers on Promises, Making Transactions Cheaper and More Accessible
Heralded by Ethereum developers as a major technical milestone, last week’s Dencun upgrade was expected to revolutionize the Ethereum ecosystem by significantly reducing transaction costs on its layer-2 networks. So, how does the situation look one week later? Overall, Dencun has delivered exactly as promised, with gas fees on integrated layer-2 networks dropping by over 90%. Median transaction fees on networks such as Arbitrum, Starknet, Optimism, Base, and Zora have fallen to one cent or below.
Gas Fees Plummet on Layer-2 Networks
- Gas fees on layer-2 networks like Arbitrum, Starknet, Optimism, Base, and Zora have dropped by over 90%.
- Median transaction fees on these networks have fallen to one cent or below.
- Data from Dune and Grow The Pie confirms the significant drop in costs.
- The reduction in gas fees is made possible by proto-danksharding and blobs.
- Blobs allow temporary storage of layer-2 data on-chain for about a month.
The implementation of Dencun’s proto-danksharding solution has played a crucial role in reducing gas fees. By allowing layer-2 data to be stored on-chain temporarily instead of indefinitely, blobs have made transactions significantly cheaper. This reduction in on-chain fees has not only impacted ETH transfers and token swaps but also heavier NFT-related transactions. On Zora, a layer-2 network built specifically for NFT minting, the median transaction cost is currently 9/10th of a penny compared to an average cost of $72 per NFT sale on the Ethereum mainnet.
Not All Layer-2 Networks Are Fully Integrated Yet
- Some layer-2 networks, like Polygon, are still in the process of fully integrating Dencun-related updates.
- Polygon’s mean transaction costs currently hover around $0.72.
- However, Polygon Labs VP of Product expects full integration within a month or two.
While most layer-2 networks have already experienced a significant drop in gas fees, there are concerns that transaction costs may rise as network traffic increases. However, despite the reduction in fees, many layer-2 networks have seen a dramatic increase in network activity. Daily transaction volumes have more than doubled on networks like Optimism, Base, Arbitrum, and Zora since the upgrade.
A Fundamental Shift in Ethereum Usage?
- L2 developers hope that the significant drop in fees will encourage users to migrate routine transactions to layer-2 networks instead of using the costly mainnet.
- Ethereum mainnet traffic remains consistent with figures from the past year.
The sustained drop in gas fees on layer-2 networks has led many developers to believe that there could be a fundamental shift in how users engage with Ethereum. By moving routine transactions to layer-2 networks, users can take advantage of significantly lower fees. However, it’s worth noting that traffic on the Ethereum mainnet has remained consistent and even slightly increased since the Dencun upgrade.
🔥 Hot Take: Dencun Upgrade Delivers on Its Promise to Reduce Transaction Costs on Ethereum Layer-2 Networks 🔥
The implementation of the Dencun upgrade on Ethereum’s layer-2 networks has resulted in a significant reduction in gas fees. Transactions on networks such as Arbitrum, Starknet, Optimism, Base, and Zora now cost one cent or less on average. This has made Ethereum transactions cheaper and more accessible than ever before.
The use of proto-danksharding and blobs has played a crucial role in enabling this reduction in gas fees. By allowing temporary on-chain storage of layer-2 data, blobs have revolutionized the Ethereum ecosystem. Not only have ETH transfers and token swaps become more affordable, but even NFT-related transactions on layer-2 networks like Zora have seen a drastic decrease in costs.
While some layer-2 networks are still in the process of fully integrating Dencun-related updates, many have already experienced a significant drop in gas fees. This has led to increased network activity and the hope of a fundamental shift in Ethereum usage. Developers anticipate that users will migrate routine transactions to layer-2 networks, reducing congestion on the mainnet and further lowering transaction costs.
However, it’s important to note that there are concerns about potential increases in transaction costs as network traffic grows. Critics argue that as demand for blobs increases, gas prices may rise over time. Nevertheless, the current drop in fees and increased network activity on layer-2 networks demonstrate the positive impact of the Dencun upgrade.
Overall, the Dencun upgrade has delivered on its promises, making transactions on Ethereum’s layer-2 networks exponentially cheaper. With lower gas fees, users can engage more actively with decentralized applications and NFT platforms without being burdened by high transaction costs. The future looks promising for Ethereum as it continues to improve scalability and accessibility through innovative upgrades like Dencun.
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