March 27, 2024
Altcoins News

Dencun Upgrade Slashes Ethereum Fees by Up to 99%

Implemented on March 13, Ethereum’s much-awaited Dencun upgrade has had positive effects on the blockchain ecosystem, especially for Layer-2 (L2) protocols. Hailed as one of Ethereum’s biggest updates since the Merge, the scalability-focused update aims to ease congestion and lower transaction fees.

Median transaction fee of L2s. Source: Dune

Starknet, a leading Ethereum-based L2 protocol, celebrated a monumental 99% reduction in gas fees following the Dencun upgrade. Gas fees plummeted to an astonishing $0.04 from over $6, demonstrating the tangible impact of the upgrade on transaction costs. Similarly, platforms such as Optimism, Base, and Zora OP mainnet experienced dramatic declines in gas fees, with Optimism’s average transaction fees dropping to $0.05.

Gas fee of Starknet. Source: Starknet on X

ArbOS Upgrade Enhances Functionality of Arbitrum One

Arbitrum One, another widely utilized L2 platform, is set to launch its ArbOS upgrade, introducing blob support to Arbitrum rollup chains. This enhancement is poised to further streamline transactions and bolster the efficiency of Ethereum’s L2 ecosystem.

EIP-484 Introduces Data Blobs for Enhanced Transaction Speed

The Dencun hard fork introduced nine Ethereum Improvement Proposals (EIPs), notably EIP-484, which introduced data blobs. These blobs provide L2s with a new transaction data type, bypassing traditional methods to facilitate faster transactions at reduced fees. Tim Beiko of the Ethereum Foundation hailed Dencun as “the most complex fork since the Merge,” emphasizing its significance in Ethereum’s evolution.

Challenges Ahead for L2 Scalability

While Dencun marks a significant milestone in Ethereum’s scalability journey, experts caution that it may only offer a temporary solution. As the adoption of rollups utilizing blobs increases, the battle for blob space is anticipated to intensify, potentially leading to higher transaction costs in the future.

The Dencun upgrade underscores Ethereum’s commitment to scalability and efficiency, providing a glimpse into the platform’s continued evolution amid growing demand and technological advancements.

Image by motoviurii on Freepik

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