Dencun Upgrade Drastically Reduces Fees on Ethereum’s L2s by Over 50%
The recent Dencun upgrade on the Ethereum network has resulted in significant cost reductions for Layer 2 solutions, while gas fees on the mainnet remain prohibitively expensive.
Implemented on Tuesday, the Dencun upgrade has had a dramatic impact on Layer 2 protocols such as Optimism, Base, Zksync, and Arbitrum. These solutions have seen a 50% reduction in transaction fees due to the change from call data to blobs.
While not all L2s on Ethereum have yet been upgraded, those that have are enjoying some of the most favorable transaction fee rates in the entire crypto blockchain. It is important to note that this upgrade has not affected the high transaction fees on Ethereum, but it represents a promising step towards more affordable transactions on Layer 2 solutions.
The fee drop following the upgrade has been substantial. The Arbitrum network, for example, has seen over 80% of its transaction charges eliminated. The average fee on Arbitrum has decreased from $2.02 to $0.5, with a median fee of $0.3552. Prior to the Dencun upgrade, Arbitrum had some of the highest transaction fees among the L2 networks on Ethereum.
Optimism, which recently reached a new all-time high, has also experienced a 58% reduction in gas fees. While it previously had one of the best transaction fee rates on Ethereum, it has been further impacted by the Dencun upgrade. The average fee on Optimism now stands at $0.05, with a median cost of $0.0038.
The Base network leads the way in terms of transaction fee reduction, with over 88% of fees eliminated. The average fee on Base has gone from $0.58 to $0.0064, and the median fee is now $0.0008.
However, despite the improvements in Layer 2 solutions, transaction fees on the Ethereum mainnet remain unchanged. There have been reports of users spending thousands of dollars on fees for transactions on the mainnet. In one instance, a user paid 93 ETH ($113,000) in fees for six transactions using a MEV bot. Another user reportedly spent approximately 216 ETH ($350,000) on a failed transaction. While the introduction of L2 solutions has provided alternatives for cheaper transactions, users are still hoping for a reduction in the average fee of $18 on Ethereum’s mainnet.
