Surprising L2 'Usage' Leaves Ethereum Founder Vitalik Buterin in Awe 😮

Ethereum Co-founder Vitalik Buterin Disappointed with Low Usage of Layer-2 Networks After Dencun Upgrade

Ethereum co-founder Vitalik Buterin expressed his disappointment with the lower-than-expected usage of layer-2 networks following the recent Dencun upgrade. During a Q&A session at ETH Taipei, Buterin responded to a question about the success of the implementation by stating that it depends on how “better” is defined. He praised Ethereum’s developers for flawlessly implementing the update but noted that the amount of traffic on layer-2 networks using Dencun has been surprisingly low.

The Dencun upgrade introduced blobs, a data storage solution that significantly reduced layer-2 gas fees. However, current usage levels are about 67% lower than what Ethereum core developers had anticipated.

While it’s true that layer-2 networks have seen an increase in transaction volume since the Dencun upgrade, Buterin and other Ethereum stakeholders expected even higher spikes in traffic. This is especially noteworthy considering the rising gas fees on the Ethereum mainnet, which have become intolerable for many retail users.

Marius Van Der Wijden, an Ethereum core developer, mentioned that it might be too early to evaluate the success of blobs since not all layer-2 networks have integrated Dencun yet. He believes there is still room for growth as more networks adopt the upgrade.

Polygon, for example, has yet to fully update to Dencun, but Polygon Labs VP of Product David Silverman expects full integration within a month or two.

Despite the disappointment in current usage levels, there is a silver lining—low blob usage has resulted in rock-bottom gas fees. However, as demand for blob space increases, it’s expected that layer-2 transaction costs will also rise.

Buterin acknowledged the benefits of cheap transaction costs for present-day rollups but expressed his excitement about usage increasing in the coming months.

Layer-2 Networks and the Dencun Upgrade

The Dencun upgrade has been a significant development for Ethereum’s layer-2 networks. Here’s a closer look at the key aspects:

Blobs: The Dencun upgrade introduced blobs, a novel data storage solution that allows layer-2 data to be stored on-chain temporarily.
Proto-danksharding: This process enables the storage of layer-2 data on-chain for about a month, drastically reducing layer-2 gas fees.
Reduced Gas Fees: By implementing blobs, layer-2 networks have seen a significant reduction in gas fees, making transactions more affordable.

The Disappointment in Usage Levels

Ethereum core developers had anticipated higher levels of usage on layer-2 networks following the Dencun upgrade. However, the current usage is considerably lower than expected. Here’s what we know:

The amount of traffic on layer-2 networks using Dencun is approximately 67% lower than what was initially hoped for.
Despite the lower-than-expected usage, most layer-2 networks have experienced an increase in transaction volume since the upgrade.
Coinbase’s layer-2 network, Base, witnessed such high traffic that transactions on Coinbase.com and Coinbase Wallet started failing intermittently.

Room for Growth with Layer-2 Networks

While some may view the current usage levels as disappointing, it’s important to note that not all layer-2 networks have fully integrated Dencun yet. Here’s what Ethereum core developer Marius Van Der Wijden had to say:

Not all layer-2 networks have switched to blobs, which means there is still room for growth.
Polygon, for example, has yet to complete its update to Dencun but is expected to integrate the upgrade within the next couple of months.

The Benefits and Future Expectations

Although usage levels may not have met expectations, there are still positives to consider. Here’s a closer look:

Low blob usage has resulted in rock-bottom gas fees on layer-2 networks.
Cheap transaction costs on present-day rollups have provided benefits for users.
Ethereum co-founder Vitalik Buterin remains optimistic and looks forward to increased usage in the coming months.

Hot Take: The Future of Layer-2 Networks

The lower-than-expected usage of layer-2 networks following the Dencun upgrade may come as a surprise. However, it’s crucial to remember that adoption takes time, and not all networks have fully integrated the upgrade yet. As more networks embrace Dencun and its benefits become evident, we can expect a surge in usage. While current transaction volumes have increased, there is still significant room for growth. The rock-bottom gas fees experienced due to low blob usage are a temporary advantage that may change as demand for blob space rises. Despite the initial disappointment, Ethereum stakeholders remain optimistic about the future of layer-2 networks.