Lighten up Ethereum, and reduce usage costs. This was the aim of the long-awaited Dencun update, which took place yesterday. The effects are already being felt: costs for second-layer solutions, or layer 2, have plummeted. Here’s an update
Layer 2 costs split following Dencun update
Until now, the massive use of Ethereum has come up against a major obstacle: transaction fees. Even when using layer 2, these were deemed prohibitive when it came to processing large numbers of transactions.
But this is now a thing of the past for second-layer solutions. Since the arrival of the Dencun update yesterday, which introduces proto-danksharding, usage costs have been particularly reduced. According to data collected via Dune, median costs have indeed plummeted :
The evolution of median fees on layer 2 since March 11
It now costs just $0.005 to use Arbitrum, compared with $0.72 three days earlier. At Zora, median transaction fees this morning stand at $0.0009… compared with over $1 on March 11.
Layer 2 fees will continue to evolve over the coming days: as the mechanisms of the various solutions are heterogeneous, we won’t know the real effect of Dencun for a few days or a week.
Fees may also rise slightly in the future, as players compete for the newly introduced data blobs. That said, the increase should be reasonable, and early figures are particularly encouraging.
A small revolution for Ethereum
This is therefore a small revolution for Ethereum, which could see applications and uses multiply, now that some transactions are processed with such derisory fees. A point also underlined by Brian Armstrong, CEO of exchange platform Coinbase:
This is huge
Reducing transaction fees and confirmation times on Layer 2 will open up so many more use cases for crypto.
We’re finally getting scalability. https://t.co/X7K3TzkMno
– Brian Armstrong (@brian_armstrong) March 14, 2024
“Reducing transaction fees and confirmation times on layer 2 will open up so many more use cases for cryptocurrencies. We finally have scalability. “
The arrival of Dencun has so far had no marked effect on the ETH price. The latter is currently trying to hold above the $4,000 threshold. The same is true of layer 2 tokens, which have fallen slightly over the past 24 hours. But from a technological point of view, what we’ve just witnessed is a breakthrough
